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Buy-to-let choice for first-time landlords hits record high

Despite several changes in the buy-to-let market, 73% of prospective investors considered property to be the best, least volatile long-term investment, according to a recent study by Benham and Reeves.

The study of 5,000 buy investors also highlighted that 83% were unlikely to sell their property over the next year.

This presents good news for potential first-time landlords, with the choice of first-time landlord buy-to-let products rising to a record high.


The latest findings from Moneyfacts.co.uk show that the number of deals available to first-time landlords has risen substantially over the past five years – up from 645 deals in 2014 to 1,405 today. In the past year alone, product numbers have increased by 137.

“Entering the buy-to-let market hasn’t been without its hurdles, and almost two years since the PRA introduced rules expected to tighten lending, the move doesn’t seem to have shaken up lenders attitudes to attract first-time landlords. In fact, the number of deals available to these individuals has now boomed to a record high,” Rachel Springall, finance expert at Moneyfacts.co.uk, commented.

She added that while the rise in choice is good news to potential landlords, the ‘financial strain’ of recent tax changes may be starting to show on those who are currently invested in property.

“ONS data highlighted that London private rental prices rose by 0.9% in the 12 months to May 2019, which is the highest annual growth seen since September 2017,” she continued. “This rise may well be linked to the staggered loss of mortgage interest tax relief, which in turn has seen landlords seeking out other ways to boost their income.”

Fixed rates for first-time landlords start below 1.50% on a two-year fixed deal, but the associated upfront product fees must be considered carefully, Springall explained.

“First-time landlords concerned about potential rate rises may consider a five-year fixed deal, and thankfully rates have fallen in this sector since 2014. In fact, the average five-year fixed rate for first-time landlords has fallen by 1.6% since July 2014, down from 4.68% to 3.52% today.”

She concluded: “As the market is awash with economic uncertainties and regulatory adjustments, consumers would do well to first seek independent financial advice if they are considering a buy-to-let investment, not just to find the best product, but to also review these impacting influences.”


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