Mortgage News
Landlord portfolio expansion fuelling buy to let
Brokers report nearly half of the mortgage deals placed were for landlords buying further properties, as confidence continues to rebound in the sector in Q2.
Paragon’s FACT index, which tracks market confidence, suggested the number of landlords building up the number of properties owned rose to 47%, up from 43% in the second quarter. Mortgages for first-time landlords made up nearly a fifth of new business at 21% in Q2, also up, this time from 18% in Q1. The proportion of remortgages fell during the second quarter to 28% (35% in Q1).
Ying Tan, managing director of specialist broker, The Buy to Let Business, said the fact Paragon mainly lends to bigger portfolio landlords and rising market confidence make this result unsurprising.
“More lenders are looking at first-time landlords now, although BM Solutions, for example, has always supported first-time buyers. BM has been very competitive recently on both purchase and remortgage loans, which might account for the drop in Paragon’s remortgage figures. Maybe the lost Paragon remortgages went to BM over the last 3 months,” said Tan.
The Financial Adviser Confidence Tracking (FACT) Index, carried out by the specialist buy-to-let mortgage lender, also found that, on average, the intermediaries interviewed conducted 5.4% more buy-to-let business in Q2 than in the first quarter.
Availability of buy-to-let finance also improved significantly during the past three months, with 64% saying availability had improved where 8% felt it had deteriorated.
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The split between buy-to-let and purchase business was almost 80:20 residential purchase versus investment business for the average adviser, according to the index.
John Heron, Paragon Mortgages managing director, said: “Government statistics just released indicate that more than 17% of English property is now in the private rented sector. All of the market indicators, however, suggest that there is still not enough property for new tenants.
“Better availability of buy-to-let finance, particularly for professional landlords, is critical to the expansion of the supply of rental property. It’s therefore, good to see that this is starting to come through.”