The days of low BTL rates 'numbered'

Landlords will be seeing the end of rock-bottom buy to let mortgage interest rates with one expert saying their days may be ‘numbered’.

While BTL landlords have more choice today than they have had before when arranging a mortgage, the number of BTL products available is at a record high for the market.

Moneyfacts says there are more than 2,000 buy to let mortgage products available as lenders increase their efforts to grab a piece of a declining customer base.

Along with a wide variety of products, lenders have also been increasing competition in the marketplace by reducing the rates for borrowing.

Now the chief executive at Commercial Trust, a specialist buy to let broker, Andrew Turner, said: "We have seen lender competition rise over the past couple of years in the buy to let market and this has helped drive BTL mortgage interest rates down and to an influx of products."

BTL products are being offered with incentives

He added that these BTL products are being offered with incentives such as free valuations, competitive fees and free legal services.

However, while the low interest rates and incentives may appear to be attractive, they do not ‘paint the full picture’.

Mr Turner says that landlords looking to borrow should analyse every aspect of the deal being offered including the suitability and cost of the mortgage.

He also says the landlords should recognise that growing competition is making the BTL market increasingly complex, particularly now there are more than 2,000 financial products available for landlords.

Mr Turner said: "The days may be numbered for rock bottom BTL mortgage interest rates."

Overseas BTL investors deterred by sluggish rent rises

Meanwhile, the proportion of properties being let by overseas BTL landlords has reached its lowest point in nearly 10 years, figures reveal.

According to Hamptons International, the proportion of homes in the UK being let by landlords living overseas has fallen sharply from the first half of 2010's figure of 14.4% to just 5.8% in the first 11 months of this year.

The estate agents say that every region has seen a drop in the number of foreign-based landlords - with London seeing the biggest fall.

In a report, Hamptons says that most overseas-based landlords are in Western Europe - it's 34% of the total - but the numbers have fallen by 2.1% since 2010.

Asia accounts for 20% and has seen a rise of 2.1% over that period with landlords based in North America accounting for 13% of the market but there's been no change since 2010.