real estate 1468143 960 720
Marketing No Comments

Intermediaries reported that 52% of buy-to-let mortgage cases in Q1 2018 were for landlords seeking to remortgage.

This was up sharply from 29% in Q1 2015 prior to the Summer Budget in the same year when wide-ranging tax changes were announced, including the gradual removal of tax relief on buy-to-let mortgage interest.

John Heron, managing director of mortgages at Paragon, said: “There’s a wide range of factors contributing to the surge in landlords remortgaging at the moment.

“These include the expiry of the initial term on mortgages taken out ahead of the stamp duty changes for second properties, the expectation of rate rises on the horizon and a desire to minimise interest costs in the face of new mortgage affordabilty rules.

“It will be interesting to see the extent to which mortgage applications for purchases and portfolio extensions increase once these factors have played out.”

Over the same time period, intermediaries said they have seen a drop in the proportion of mortgage applications from first-time landlords, down from 19% to 13% of the total.

They also reported a fall in landlords remortgaging to raise funds in order to extend their portfolios. Remortgaging for portfolio expansion has fallen from 39% to 22%.

Among those landlords looking to remortgage, the proportion seeking to secure a better interest rate reached the highest level ever in Q1 2018.

Compared with three years ago when equal numbers of landlords were remortgaging for a better rate and to raise capital, in Q1 2018 60% of landlords said securing a better interest rate was their primary objective.

This compares with just 30% of landlords who said raising capital was their top priority. As a result, the gap between landlords looking for a better rate and those raising capital is now at the widest seen since 2013.

Source: Mortgage Introducer

Leave a Reply

Your email address will not be published. Required fields are marked *