“The properties that landlords are buying are, in many cases, those that would also be a target for first-time buyers,” said Moneyfacts spokesperson, Michelle Slade.
“This poses a further problem for first-time buyers, many of whom are already struggling to get onto the property ladder.”
The number of buy-to-let (BTL) mortgages has just passed the 500 mark and products are at their highest level since September 2008. At its lowest ebb in July 2009, the number of products fell to 189.
The average fixed rate in the sector have fallen by 0.98% over the last two years, with variable rates also decreasing an average of 0.57%.
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.
Slade said: “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.
A CML spokesperson said: “The current low number of first-time buyers is in part due to lack of demand and confidence issues, rather than loans being snapped up by landlords. With fewer homeowners however, a healthy rental market fills an important role in the housing market.”
