Buy to let makes up one in five mortgages – Paragon

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  • 12/12/2017
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Buy to let makes up one in five mortgages – Paragon
Buy to let mortgages made up almost a fifth of mortgages in the three months to October, according to a report by lender Paragon.

Combined with first-time buyers, landlord borrowing was more popular than remortgaging in the third quarter of 2017,  the latest survey of mortgage intermediaries carried out by Paragon showed.

At the same time, borrowers spurned variable rate mortgages for longer terms fixes.

Just one in 10 mortgages was a tracker or variable rate, the findings show.

Five-year fixes made up a record 39% of mortgages written in the third quarter of 2017.

Almost half of mortgages were two-year fixed rates.

The Bank of England in November raised interest rates for the first time in a decade.

As a result, borrowers appear to be prioritising low rates for a longer term.

Interest-only repayments still make up the remaining almost one in five mortgages.

John Heron, managing director at Paragon Mortgages, (pictured) said: “With interest rates gradually increasing, after a long period of historic lows, it is not surprising that homeowners are racing to fix the cost of their mortgage for longer terms.

“Over the coming months, it is likely that we will see a further surge of borrowers locking into fixed rates before they climb higher.

“It is positive for the buy to let market to see application numbers increase after weaker numbers in the previous three quarters.

“Hopefully, this will be a sign of things to come for the buy to let market after a period of uncertainty following regulatory changes, reduced tax relief and the uncertainty around Brexit.”

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