Recent data suggests that the number of deals available for buy-to-let mortgages has hit record highs, with over 1,000 of them available to consumers.
According to the price comparison site Moneyfacts, 1,011 mortgage products were available in August this year, in sharp comparison to the same period in 2014 when 681 deals were available. The site stated that the increase could be due to lenders competing for the business of pensioners taking advantage of new pension rules.
From April 2015, the government has made it possible for people of pension age to cash in some of their retirement pension early. According to a finance expert at Moneyfacts, Charlotte Nelson, the rapid growth in the buy-to-let market is no surprise, with extremely low interest rates on savings and high rental income. Nelson also stated that average interest rates have also fallen by around three per cent, which has contributed to the booming buy-to-let market.
However, buy-to-let landlords may face a few problems as the Chancellor scrapped tax relief on the interest paid on buy-to-let mortgages and introduced changes to the wear and tear allowance. Previously, landlords could claim a 10 per cent allowance each year to cover wear and tear. However, due to changes announced in the summer Budget, landlords may only claim for the cost of replacing any furnishings.
CeMAP courses in Leeds and other areas of the UK prepare mortgage advisers for questions they may be asked about the buy-to-let mortgages. Seeking professional advice is the best way to source a mortgage product that is affordable in the long term.