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Only 37% of BTL products available directly from lenders

Research from Paragon Bank shows that 57% of landlords are most likely to source their next buy-to-let mortgage from their existing broker, while 41% state they would be most likely to go direct to a lender for a buy-to-let mortgage. According to, currently 37% of buy-to-let mortgage products are available directly.

The research from Paragon Bank also revealed that there is little variance in the attitude towards retaining their current mortgage broker between portfolio and non-portfolio landlords, with 59% and 50% respectively saying they are most likely to remain with their current broker. (A portfolio landlord has four or more properties).

Landlords pausing on increasing their portfolios

Only 8% of landlords expect to purchase property in the next quarter, almost reaching the historic low of 6% in quarter four 2018. While those selling properties decreased by only one percentage point from 23% to 22%. In quarter three in 2014, the gap between landlords expecting to sell and those expecting to buy was equal, whereas the current gap now sits at 15%.

An area where portfolio and non-portfolio landlords differ is on the expectation of purchasing a property in the next quarter. Only 1% of non-portfolio landlords expect to purchase, while 10% of portfolio landlords expect to buy.

John Heron, director of mortgages at Paragon, said: “With so much change in the private rented sector (PRS) in recent years, landlords have had to adapt quickly to higher taxation, which has impacted returns on their portfolios. Throughout that time, landlords will have relied more heavily than ever on intermediaries to help them get the very best deals available. Therefore, it is no surprise that, while the future remains unpredictable, landlords are maintaining some stability by reusing the same brokers for their next mortgage.

“It’s surprising, however, to hear that some landlords are considering approaching a lender directly for their next mortgage. This does not match well with the actual behaviour of landlords, particularly in the portfolio segment where nine out of 10 landlords use an intermediary.”

Paragon Bank’s PRS Trends Report for quarter three 2019 was conducted with over 200 buy-to-let landlords, of which the large majority have been renting for over 10 years and are classed as professional landlords with three or more properties.

Source: Property118

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Buy-to-let mortgage choice at 12-year high

The number of buy-to-let (BTL) products available has hit its highest level since the beginning of the financial crisis in October 2007, data shows.

Over the past 12 months, the total number of available BTL products has risen by 21 per cent to 2,396 in June, from 1,929 in the same month a year ago, according to Moneyfacts, the financial data firm.

In June the number of buy-to-let products has increased month-on-month by 143 from May 2019 when it stood at 2,253.

Meanwhile, average BTL mortgage rates have also risen over the past 12 months, with the typical two-year fixed rate increasing by 0.17 per cent from 2.88 per cent in June 2018 to 3.05 per cent this month.

The average five-year buy-to-let fixed rate rose by 0.11 per cent to stand at 3.54 per cent.

However, both rates still stand significantly lower than they were in October 2007 at 6.36 per cent and 6.39 per cent.

Rates steady despite increasing competition

Moneyfacts spokesman Darren Cook said that product competition within this specialised mortgage area is continuing to grow.

“The largest concentration of BTL product choice can be found at the maximum 75 per cent loan-to-value (LTV) tier, where there are currently 352 two-year fixed rate products available and 374 five-year fixed rate products available,” he said.

“Coincidently, the average fixed rates at the 75 per cent LTV tier for the two- and five-year sectors are currently 3.05 per cent and 3.55 per cent respectively, equalling or near-equalling the average rates for both terms across all tiers.

“The increase in the BTL average rates contrasts with the downward trajectory of their residential mortgage counterparts, where product competition seems to have instead resulted in rates falling.

“This disparity in trends is likely to be attributed to the different approach lenders take to risk between these two sectors, and that economic uncertainty may be having a more adverse influence on the BTL mortgage market than it is having on the residential mortgage market.”

Written by: Antonia Di Lorenzo

Source: Your Money