Number of B2L products up 26% in Q3
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The number of buy-to-let mortgage products on the market totalled 508 in Q3, up 26% compared to the 403 deals available in Q2, according to the latest buy-to-let index from Mortgages for Business.
There was one new entrant to the lending market in the last three months, taking the number of buy-to-let lenders up to 23.
Average yields for vanilla buy-to-let properties increased from 5.8% in Q2 to 6.3% in Q3, which Mortgages for Business puts down to continued demand pushing up rents.
Meanwhile average yields for houses in multiple occupation fell from 10% in Q2 to 9.3% in Q3, which the firm says is a result of lenders launching products over the last quarter aimed at investors purchasing smaller HMOs.
It says these new products have also resulted in the average LTV for HMOs rising from 60% to 66% and the average loan size falling from £321,836 to £292,969 between Q2 and Q3.
The average yield for multi-unit freehold block deals rose from 6.6% in Q2 to 6.9% in Q3, the third consecutive increase.
David Whittaker, managing director at Mortgages for Business, says: “This is the third straight quarter in which the number of buy-to-let deals has risen in response to overwhelming demand from professional investors.
“However, growth over the last three months slowed to 26% having risen 35% in the previous quarter suggesting a seasonal fluctuation during the summer.
“With the base rate set to remain low for the medium term, property prices falling and demand from tenants showing no signs of dropping, investors will continue to capitalise on the healthy returns available from the buy-to-let market.”
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