Buy To Let Remortgage Business Still Falling
14 June 2010 / by Rachael Stiles
The proportion of buy to let remortgage business going through the UK’s mortgage brokers has fallen for the fifth consecutive quarter, Paragon Mortgage has revealed.
According to Paragon’s Financial Adviser Confidence Tracking Index, 28 per cent of buy to let remortgages went though brokers in the first quarter of 2010, down from 30 per cent in the final quarter of 2009.
This decline brought the proportion of buy to let remortgages being handled by brokers to its lowest level for five years.
But while remortgage buy to let customers might be waiting it out on standard variable rates until a better deal comes along, the proportion of first time buy to let landlords using a broker rose for the second quarter in a row, accounting for 21 per cent of buy to let mortgage business.
And, while house prices continue to go up and down and lending remains tight, the number of landlords expanding their property portfolios fell, to account for 45 per cent during the first quarter of 2010, down from 52 per cent in the final quarter of 2009.
Overall, the proportion of buy to let mortgage business going through mortgage brokers fell from 14 to 13 per cent in the first quarter of the year.
John Heron, managing director at Paragon, explained that in the current mortgage market there is “little incentive for landlords to move from their existing lender” and there is a “serious lack” of buy to let mortgage products available.
While interest rates remain low, the majority of landlords are financially better off with their reversionary rate rather than opting to remortgage, he said.
At the market’s peak there were more than 3,500 buy to let products on the mortgage market, but this has fall to around 300 today.
Mr Heron adds: ‘It is positive that first-time landlords are coming back into the market, however, as the stock of private rented sector property is coming under increasing strain. It is important that lenders encourage landlords who take a long-term approach to their investment, rather than speculators.”
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