The rise in the number of BTL mortgages has resulted in much needed competition in the sector, which has helped to push down rates, despite no change in bank base rate for the last 28 months.

Mortgage Type	Average rate 2 years ago	Average rate 1 year ago	Average rate 6 months ago	Average rate today	Fall in average rate over last 2 years
Fixed	6.03%	5.78%	5.31%	5.05%	-0.98%
Variable	4.91%	4.90%	4.48%	4.34%	-0.57%
Source: Moneyfacts.co.uk 28.7.11

Michelle Slade, spokesperson for Moneyfacts.co.uk, commented:

“The number of BTL mortgages has increased steadily hitting 505 today, having fallen to just 189 mortgages in July 2009.

“In the last few years, a number of lenders have returned to the BTL market, giving a much needed boost to the sector.

“Lenders are currently offering a range of options for landlords, where as a few years ago some had just one deal available.

“Increased competition has driven down BTL mortgage rates, particularly on fixed rate deals where the average rate has fallen by nearly 1%, despite no change in base rate.

“Recent figures showed the average rental income has hit an all time high, making the BTL market extremely profitable for landlords.

“With rental demand continuing to increase, lenders will look to strengthen their presence in this sector.

“Moneyfacts.co.uk has seen a threefold increase in the demand for BTL mortgages since March 2010.

“The properties that landlords are buying are, in many cases, those that would also be a target for first-time buyers.

“This poses a further problem for first-time buyers, many of whom are already struggling to get onto the property ladder.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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