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Buy-to-let rates drop as landlords brace for Budget

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
28/10/2024

Buy-to-let rates drop as landlords brace for Budget

Buy-to-let fixed rates stand at their lowest since the start of September 2022, according to the latest analysis by Moneyfactscompare.co.uk. However, the upcoming Budget could reveal tax raids on landlords.

Buy-to-let rates drop as landlords brace for Budget

Buy-to-let fixed rates stand at their lowest since the start of September 2022, according to the latest analysis by Moneyfactscompare.co.uk. However, the upcoming Budget could reveal tax raids on landlords.

  • Average fixed rates over two- or five-year fixed terms fell month-on-month and have remained below 6% since the start of 2024. These rates sit at their lowest levels since the start of September 2022, before the fiscal announcement.
  • Overall buy-to-let product availability (fixed and variable) rose month-on-month. Product choice is greater year-on-year, and is at its highest level for over two years (June 2022 - 3,484). Deeper analysis shows a month-on-month rise of 40 five-year fixed deals, and a rise of 47 two-year fixed deals.

 

  • Average fixed rates over two- or five-year fixed terms fell month-on-month and have remained below 6% since the start of 2024. These rates sit at their lowest levels since the start of September 2022, before the fiscal announcement.
  • Overall buy-to-let product availability (fixed and variable) rose month-on-month. Product choice is greater year-on-year, and is at its highest level for over two years (June 2022 - 3,484). Deeper analysis shows a month-on-month rise of 40 five-year fixed deals, and a rise of 47 two-year fixed deals.

 

Buy-to-let market analysis

Product numbers

Oct-22

Oct-23

Apr-23

Sep-24

Oct-24

BTL product count (fixed and variable)

988

2,581

2,883

3,186

3,277

Two-year fixed rate BTL all LTVs

183

773

947

1,100

1,147

Two-year fixed rate BTL at 60% LTV

35

67

72

77

86

Two-year fixed rate BTL at 75% LTV

84

379

398

514

556

Two-year fixed rate BTL at 80% LTV

28

97

136

130

150

Five-year fixed rate BTL all LTVs

375

1,136

1,270

1,399

1,439

Five-year fixed rate BTL at 60% LTV

36

81

81

93

92

Five-year fixed rate BTL at 75% LTV

197

613

574

698

742

Five-year fixed rate BTL at 80% LTV

52

85

141

145

162

Average rates

Oct-22

Oct-23

Apr-23

Sep-24

Oct-24

Two-year fixed rate BTL all LTVs

5.57%

6.40%

5.52%

5.35%

5.24%

Two-year fixed rate BTL at 60% LTV

4.52%

6.09%

5.21%

4.86%

4.67%

Two-year fixed rate BTL at 75% LTV

5.41%

6.40%

5.56%

5.37%

5.25%

Two-year fixed rate BTL at 80% LTV

6.74%

6.95%

6.22%

6.08%

5.88%

Five-year fixed rate BTL all LTVs

6.05%

6.32%

5.52%

5.33%

5.24%

Five-year fixed rate BTL at 60% LTV

4.26%

5.70%

4.81%

4.65%

4.45%

Five-year fixed rate BTL at 75% LTV

6.04%

6.36%

5.54%

5.38%

5.29%

Five-year fixed rate BTL at 80% LTV

7.10%

6.84%

6.19%

6.01%

5.85%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

 

Buy-to-let market analysis

Product numbers

Oct-22

Oct-23

Apr-23

Sep-24

Oct-24

BTL product count (fixed and variable)

988

2,581

2,883

3,186

3,277

Two-year fixed rate BTL all LTVs

183

773

947

1,100

1,147

Two-year fixed rate BTL at 60% LTV

35

67

72

77

86

Two-year fixed rate BTL at 75% LTV

84

379

398

514

556

Two-year fixed rate BTL at 80% LTV

28

97

136

130

150

Five-year fixed rate BTL all LTVs

375

1,136

1,270

1,399

1,439

Five-year fixed rate BTL at 60% LTV

36

81

81

93

92

Five-year fixed rate BTL at 75% LTV

197

613

574

698

742

Five-year fixed rate BTL at 80% LTV

52

85

141

145

162

Average rates

Oct-22

Oct-23

Apr-23

Sep-24

Oct-24

Two-year fixed rate BTL all LTVs

5.57%

6.40%

5.52%

5.35%

5.24%

Two-year fixed rate BTL at 60% LTV

4.52%

6.09%

5.21%

4.86%

4.67%

Two-year fixed rate BTL at 75% LTV

5.41%

6.40%

5.56%

5.37%

5.25%

Two-year fixed rate BTL at 80% LTV

6.74%

6.95%

6.22%

6.08%

5.88%

Five-year fixed rate BTL all LTVs

6.05%

6.32%

5.52%

5.33%

5.24%

Five-year fixed rate BTL at 60% LTV

4.26%

5.70%

4.81%

4.65%

4.45%

Five-year fixed rate BTL at 75% LTV

6.04%

6.36%

5.54%

5.38%

5.29%

Five-year fixed rate BTL at 80% LTV

7.10%

6.84%

6.19%

6.01%

5.85%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“The buy-to-let market has had its fair share of challenges over the years, so landlords might find it encouraging to see fixed interest rates have been on the downward trend. There are also many more deals for borrowers to choose from, as lenders have been adjusting their ranges to accommodate demand. These are positive signs for prospective landlords, but there are numerous other factors to consider before taking the leap into the buy-to-let sector, not just the cost of a mortgage. The margin of profit from rental income may well be tighter than expected, but property is still regarded as a safe long-term investment.

“The tax changes which have impacted the buy-to-let market have resulted in droves of landlords setting up limited companies to manage their portfolios. The number of limited companies set up between January and September this year was 23% higher year-on-year and 70% of new buy-to-let purchases in England and Wales are now made using a limited company, according to Hamptons estate agents. However, landlords could reach breaking point if stamp duty relief is unwound as planned next year and those facing dwindling profits may sell up, leading to a mass exodus. There may then be a flood of sales, during a window of opportunity, to avoid paying a potential rate hike of capital gains tax (CGT).

“Landlords will be on tenterhooks to see how the upcoming Budget will play out and lenders may remain fluid with their fixed rate pricing over the next few weeks, particularly due to volatility surrounding swap rates. Any borrowers concerned about their present situation would be wise to seek independent advice if they need support or indeed to navigate the latest deals if they are due to refinance in the next few months.”

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“The buy-to-let market has had its fair share of challenges over the years, so landlords might find it encouraging to see fixed interest rates have been on the downward trend. There are also many more deals for borrowers to choose from, as lenders have been adjusting their ranges to accommodate demand. These are positive signs for prospective landlords, but there are numerous other factors to consider before taking the leap into the buy-to-let sector, not just the cost of a mortgage. The margin of profit from rental income may well be tighter than expected, but property is still regarded as a safe long-term investment.

“The tax changes which have impacted the buy-to-let market have resulted in droves of landlords setting up limited companies to manage their portfolios. The number of limited companies set up between January and September this year was 23% higher year-on-year and 70% of new buy-to-let purchases in England and Wales are now made using a limited company, according to Hamptons estate agents. However, landlords could reach breaking point if stamp duty relief is unwound as planned next year and those facing dwindling profits may sell up, leading to a mass exodus. There may then be a flood of sales, during a window of opportunity, to avoid paying a potential rate hike of capital gains tax (CGT).

“Landlords will be on tenterhooks to see how the upcoming Budget will play out and lenders may remain fluid with their fixed rate pricing over the next few weeks, particularly due to volatility surrounding swap rates. Any borrowers concerned about their present situation would be wise to seek independent advice if they need support or indeed to navigate the latest deals if they are due to refinance in the next few months.”

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Contact Us If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant