Product choice for landlords in the buy-to-let sector has begun to recover over the last two months although rates remain at higher levels, according to the latest analysis by Moneyfacts.  

The data group says that overall BTL product availability – among fixed and variable options – jumped by 781 in the eight weeks since the start of October to 25 November to 1,769 different loans.  

It adds that average fixed rates rose over the same period, over two- and five-year fixed terms.  

The group says the number of two-year fixed-rate BTL products across all loan-to-value ratios over the period lifted by 259 to 442, while five-year fixed-rate BTL products across all LTVs rose by 257 to 632 options.  

It adds that the rate of two-year fixed-rate BTL products across all LTVs was 93 basis points higher at 6.50% over the period, while five-year fixed-rate BTL rates across all LTVs lifted by 37 basis points to 6.47%.  

The data comes after chancellor Jeremy Hunt calmed international debt markets last month, by largely reversing former chancellor Kwasi Kwarteng’s tax-cutting mini-budget in September, which saw the number of products on the market fall sharply while remaining loan prices spiked.       

Moneyfacts finance expert Rachel Springall says: “The BTL sector has faced notable market turmoil, so it’s positive to see product choice gradually returning since the start of last month.   

“A rise in choice could indicate an encouraging sentiment across lenders that appear to be adjusting their ranges to cater to landlords searching for a new deal.  

“The cost for locking into a new fixed deal has risen since the start of October, and the overall average BTL fixed rates across both two- and five-year terms sit above 6%. So, despite product choice starting to return, landlords will be paying higher interest rates than if they secured a deal just eight weeks ago.   

“There are high expectations that interest rates will come down in the weeks ahead, so it would not be too surprising if landlords wait a little longer before they refinance, particularly as we approach the end of the year.  

She adds: “Prospective landlords assessing the potential returns by investing in buy-to-let may be concerned about their profit margins due to rising interest rates and the cost of living.   

“Any investor will need to carefully balance their rental expectations amid rising costs as it is difficult to tell how investors could be impacted moving into 2023.   

“However, since January 2020, rents have risen 19% across Great Britain, equating to an extra £2,351 a year for tenants, according to a study by Hamptons. It’s essential any potential borrower seeks independent financial advice before entering any arrangement to ensure it’s the right choice for them.”