Mortgage News Buy To Let Mortgages Going Strong
15 October 2010 / by Rachael Stiles
Buy-to-let lending accounted for nearly one in five mortgages through intermediaries in the third quarter of 2010, suggesting that the sector is ‘going strong’.
According to specialist buy-to-let mortgage lender Paragon Mortgages’ Financial Adviser Confidence Tracking report, 17 per cent of all mortgage lending handled by intermediaries in the third quarter was for buy-to-let.
Paragon found that the strength of the buy-to-let mortgage sector is largely being driven by experienced landlords who are expanding their property portfolios, with this group accounting for half of buy-to-let business in that quarter.
The panel-based survey of intermediaries also showed that 33 per cent of buy-to-let lending was for remortgaging.
First-time landlords represented 16 per cent of buy-to-let business, while property substitution accounted for three per cent.
Commenting on the figures, Nigel Terrington, chief executive of Paragon Group, said that landlord confidence is behind the strength of the buy-to-let mortgage sector, as they take advantage of the wider availability to expand their portfolios.
Paragon Mortgages has recently reentered the buy-to-let mortgage sector, having temporarily exited the market during the economic crisis when lending was severely repressed.
Mr Terrington said that the reintroduction of Paragon buy-to-let mortgages into the market will serve to “create some much needed competition and innovation and widen investment opportunities for landlords.”
“The fact that nearly half of buy-to-let business during the period was for experienced landlords to expand their portfolios is encouraging because it is this group of landlords who will drive the growth of the market.”
He added that the predicted continuing growth of tenant demand means that “the UK needs more properties in the private rented sector to help keep pace.”
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