Buy to let remortgage activity reaches all-time high
Landlords are making their buy-to-let mortgages work harder for them, in the face of the changes to stamp duty and the first tax bills due in January 2019 which will start showing the withdrawal of mortgage interest tax relief.
For the 2017-18 tax year landlords will only be able to claim 75% of their mortgage tax relief. So a significant number of landlords are looking to manage their costs by shopping around for a better deal on their mortgage.
Fifty-seven percent of all buy-to-let mortgages being arranged in the last three months were remortgages on existing deals, with six out of ten lenders saying that landlords were shopping around for better interest rates.
Landlords are investing less in the private rented sector, according to mortgage lender Paragon. The proportion of first-time landlord business fell from 14% to 10% in the third quarter of this year.
“It’s no surprise that landlords are taking the opportunity to reduce their mortgage finance costs as one part of their strategy to mitigate the impact of higher taxation,” says John Heron, managing director of mortgages at Paragon.