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Brokers - what is the BTL market like at the moment?

Journalist: John Fitzsimons, Freelance

ended 10. October 2023

Morning brokers

This week Moneyfacts published new data about the state of the buy to let market currently, finding that fixed rates have fallen while there has been a spike in product numbers (https://www.mortgagesolutions.co.uk/news/2023/10/09/buy-to-let-fixed-rates-fall-and-product-availability-rises-%e2%80%92-moneyfacts/)

I'd like to get your sense of the state of the market at the moment, and what may lie ahead for landlords:

  • What demand are you seeing for BTL at the moment? Is it coming from existing landlords or first timers?
  • What is the pricing like? Are lenders really open for business?
  • What are service levels like? Are there any lenders that stand out particularly on this front?
  • Finally, what do you think we can take from this around what the prospects are for landlords over the next year or so?

Any and all thoughts on BTL very welcome!

8 responses from the Newspage community

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Michelle LawsonVerified
Director at Lawson Financial
I am still doing a lot of buy to let, but primarily remortgages for existing landlords. There are a few customers who are contemplating letting out their property as they are having problems selling. Unless the Government, current or incoming, makes the appropriate changes to the sector and pledges to support the PRS, things are going to continue slowly. By alienating landlords, it removes 50% of the property chain-starters, the others being first-time buyers, and this isn't good. Lenders are reducing rates, however fees are 5-7% of the loan amount to achieve this. These fees are then usually capitalised, which can leave landlords in a sticky situation when coming to review their mortgage options with regards to loan to value.
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Craig FishVerified
Director at Lodestone Mortgages
Buy to Let is virtually non-existent at the moment, for anything but product transfers and for those who are fortunate enough to have very low gearing. Whilst pricing may be improving, the stress test calculations and rental income aren't, so it's virtually impossible to make the numbers work. Landlords are not going to have it very good over the coming year until we see rates drop further and lenders ease their stress test calculations.
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Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
Many landlords are keen to explore their mortgage options and then disappointed by the lack of them. With stress tests still high on new lending, most will switch to a new deal with their existing lender through necessity. Not many investors are looking to add to their portfolios at the moment, with some looking to sell where margin has been eroded.
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Jamie AlexanderVerified
Mortgage Director at Alexander Southwell Mortgages
In 2023, the buy-to-let market has seen a significant decline, with it virtually non-existent for all but product transfers and those with very low gearing. While there may be some improvements in pricing, the challenges lie in stress test calculations and rental income, making it almost impossible to make the financials work. Landlords are facing tough times ahead, especially until we witness further drops in interest rates and a relaxation in lenders' stress test criteria.
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Steven Hargreaves0
Mortgage and Protection Adviser at The Mortgage Co
Buy-to-let ordinarily accounts for between 25%-30% of our business, but in 2023 it has been less than 5%. We are still getting a similar number of enquiries, but once rates, product fees and stress rates are taken into account, very few get beyond the enquiry stage. This year the buyto-let business we have conducted has been existing clients whose deals are coming to an end, rather than new clients buying properties and adding to their portfolios. Existing buy-to-let borrowers are having quite a shock when their current deals come to an end with the interest rate increases, albeit with most of these clients' rental income in the same period has increased. Lenders have improved their service levels, which is to be expected.
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Marcus WrightVerified
Managing Director at Bolton Business Finance
Landlords are very much still put off from making new purchases at present by what they consider eye-watering interest rates. On the flip side, we are seeing existing buy-to-let landlords coming off fixed rates and hitting very expensive standard variable rates. These can be up to 3x higher than what they were paying. So we are seeing an increase in remortgage enquiries but a decrease in purchases of new buy to lets going ahead.
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Adam Smith0
Founder at Alfa Mortgages
The buy-to-let market continues to display resilience, especially among existing landlords who maintain an impressive average loan-to-value (LTV) ratio of around 60%. Recent rate reductions have bolstered their financial positions even more.

Furthermore, new House in Multiple Occupation (HMO) investments have proven to be a viable option, with some cases reaching an impressive 75% LTV.

Additionally, service levels in the industry have remained consistently high, largely due to a decrease in buy-to-let (BTL) applications across the board.
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Alastair HoyneVerified
CEO, Finanze Capital at Finanze Capital
We are seeing huge demand for buy to let at the moment, its coming from all angles but more existing landlords over FTBs. Pricing has really stabilised I think lenders want to do as much lending as possible, some even have rates lower than the base rate so they are keen to lend! Service levels I am finding vary so much lender to lender at the moment, some are horrendous at 10-13 day SLAs however other are at 1-2 days. FHL are a lender I think are really great for keeping their SLAs down and sticking to them. I think the future is bright for landlords, over the scare they had with rates following the mini budget things are improving, lenders want to lend, rates are dropping and demand for tenants is ever increasing.