Moneyfacts: B2L going through ‘renaissance’ as rates tumble

Average buy-to-let fixed rates have fallen by up to 50 basis points over the past year, according to Moneyfacts.co.uk.

Data shows the average buy-to-let two-year fixed rate has fallen from 3.94 per cent a year ago to 3.45 per cent now. Two years ago the average was 4.44 per cent.

The average five-year fixed rate has fallen from 4.65 per cent a year ago to 4.25 per cent now. Two years ago the average was 4.67 per cent.

There are now 83 two-year fixed rates below 3 per cent, compared to just 16 a year ago, while there are 143 five-year fixes below 5 per cent, compared to 55 a year ago.

Moneyfacts.co.uk finance expert Charlotte Nelson says: “Buy-to-let mortgages are experiencing a renaissance, becoming not only more widely available but cheaper, too.

“With more five-year fixed rate deals charging below 5 per cent than ever before, it is little wonder that the newly emancipated pensioners are genuinely considering buy-to-let as a retirement option.

“But those looking at this route as an alternative to a pension need to look at all aspects of the mortgage. Many lenders restrict the age they will borrow up to, so older borrowers would be wise to seek the guidance of a financial adviser who can access a larger portion of market.

“With easy savings to be made you are now likely to be recouping more in rent, which will allow you to get a bigger return on an investment.”