Demand for rental property is leading to an increase in buy-to-let mortgage options available for property investors

Buy-to-let options and the cost of borrowing

As the UK economy continues to bounce back post-pandemic, and the UK property market continues to grow in value, lenders are increasing the range of mortgage options available to buy-to-let landlords – with over 2,709 mortgage products currently available to choose from, and over 200 new options launched in the last month. Whilst the initial UK lockdown in March 2020, saw mortgage options for buy-to-let landlords decrease, deals at 80% LTV have now begun to return to the market, much to the approval of property investors with smaller deposits.

In addition, the increase in products available is also causing the cost of borrowing to become even more affordable – with average interest rates now lower than those recorded in July 2019. It isn’t just new investors who are seeing the benefit either, for investors who are reaching the end of their current mortgage period, they may now be able to re-mortgage their properties at a cheaper rate.

With the stamp duty holiday’s most significant savings now no longer available, the demand from owner-occupiers is expected to calm, leaving more properties available for investors who are able to take advantage of the record low rates of borrowing and the wider selection of mortgage products on the market.

A rental market with growing demand

Whilst the record-breaking numbers of property sales in the UK may begin to tail off over the coming months due to less interest from the owner-occupier market, the demand for rental property remains high. In May 2021, industry trading body Propertymark announced that a record number of new prospective tenants had registered for homes and predicted this trend would follow through for the months to come.

As the UK has slowly been coming out of lockdown, there has been a migration of people back into city centres – this, in turn, has led to a significant increase in average rental values over the last two months, with the average monthly rent now at a record high of £1,007. Perhaps the most interesting trend, however, is the rate at which rents outside of the capital have increased over the period, regional cities are currently seeing the highest rates of rental growth, with values increasing on average by 10% outside of London.

Within our own business, we have also seen confidence in the market translate into a record number of lets, with our in-house lettings business seeing a 400% increase in tenant enquiries from overseas students, and over 3,000 new tenant enquiries from across the world per month.

With a return to normal life very much underway in the UK, many industry experts are predicted that the UK property market will continue to go from strength to strength, and investors from across the world will be looking to take advantage of less competition from the owner-occupier market, and a more affordable cost of borrowing.

If you are looking to make the most of the spike in rental demand in our major cities, get in touch with our property experts, and begin your investment journey with us today.