Loan sizes offered to buy-to-let borrowers have bounced back following the market contraction last autumn, according to the latest data from Mortgage Broker Tools (MBT).

Analysis of real cases processed through the MBT research software shows that, in November 2022, buy-to-let affordability fell to its lowest level on record, with 19% of enquiries failing to find one lender able to provide the loan size requested.

However, in recent weeks, competition has returned to the market, with lenders cutting rates and offering more achievable stress testing. Consequently, in January 2023, only 10% of buy-to-let enquiries were deemed to be unaffordable.

At the same time, MBT also received a record number of monthly buy-to-let mortgage enquiries in January. This high demand was across a range of buy-to-let client types including first time landlords and investors looking for variable rate products.

The top lender for buy-to-let affordability was The Mortgage Works, which was the top affordability option on 11% of all enquiries.

Tanya Toumadj, CEO at Mortgage Broker Tools, said: “The last quarter of 2022 was a tough time for buy-to-let investors, as rate rises significantly impacted stress tests and the loan sizes available contracted considerably. However, buy-to-let has bounced back and the situation has improved quickly. Competition has returned to the market, lenders are now starting to cut rates and many are offering more achievable stress testing.

“We have also seen record demand for buy-to-let mortgage enquiries at MBT in January, and so the outlook for brokers is much brighter than it was just a few months ago. Buy-to-let clients do still face challenges, however, and so it’s vital that brokers have access to research softwar that enables them to quickly and easily assess the options available to their clients.

“MBT is the most comprehensive research software available in the market, providing brokers with accurate calculations of how much their clients can borrow from a panel of more than 40 residential and nearly 70 buy-to-let lenders, based on affordability and criteria. Results from all lenders are delivered in under a minute, with no approximations or estimates.”