The search criteria platform says buy-to-let affordability fell to its lowest level on record in November, with 19% of enquiries failing to find a lender able to provide the loan size requested.
But it adds in recent weeks, “competition has returned to the market”, with lenders cutting rates and offering more achievable stress testing.
Last month, only 10% of BTL enquiries were deemed by lenders to be unaffordable.
The data comes after September’s tax-cutting mini-Budget from then Chancellor Kwasi Kwarteng, which spooked markets and saw mortgage rates climb.
However, current Chancellor Jeremy Hunt reversed the majority of these tax cuts in October and in his November Autumn Statement, which has seen home loan rates begin to fall in recent weeks.
The platform adds that it received a record number of monthly BTL mortgage enquiries in January.
“This high demand was across a range of BTL client types including first-time landlords and investors looking for variable rate products,” the firm points out.
It says the top lender for BTL affordability was The Mortgage Works, which was the best affordability option on 11% of all enquiries.
Mortgage Broker Tools chief executive Tanya Toumadj says: “The last quarter of 2022 was a tough time for BTL investors, as rate rises significantly impacted stress tests and the loan sizes available contracted considerably.
“However, BTL 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 BTL mortgage enquiries at Mortgage Broker Tools in January, and so the outlook for brokers is much brighter than it was just a few months ago.”
