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Buy-to-let remortgage market to stay strong and grow more competitive – Foundation

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  • 09/05/2019
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Buy-to-let remortgage market to stay strong and grow more competitive – Foundation
Research revealed one in three portfolio landlords will remortgage in the coming year, with a fifth planning to buy into a limited company structure.

 

The Foundation BVA BDRC research drawn from 829 online interviews revealed that portfolio landlords with four or more mortgaged buy-to-let properties are more likely to be refinancing over the course of the next 12 months, confirming a raft of market opportunities for brokers.

Of the landlords surveyed, 51 per cent said they would remortgage as an individual, 17 per cent said they would do so within a limited company, while 16 per cent said it might depend on circumstances.

Foundation said as limited company structures grow in popularity this is a trend that can only increase as landlords choose to place portfolios in tax wrappers.

 

Bedrock of buy-to-let market

Jeff Knight, director of marketing at Foundation Home Loans, said: “Remortgage activity has been the bed-rock on which the buy-to-let market has been founded for a number of years, particularly as the increase in stamp duty charges for additional property owners has hit the number of new purchases.”

He noted that more than half of all landlords intended to buy their next buy-to-let property through a special purpose vehicle of some kind, rising to seven in 10 for landlords with more than 11 properties in a portfolio.

He added that 71 per cent intended to use a buy-to-let mortgage to finance their purchases, which Foundation believed presented a significant opportunity for mortgage advisers.

Knight said: “These research results certainty chime with Foundation’s own business results for April with 62 per cent of all our mortgage applications coming from portfolio landlords and 53 per cent for limited company business.”

 

Brokers must understand details

In an article last month for Specialist Lending Solutions, Connect for Intermediaries CEO Liz Syms said it was a common understanding that brokers should not get involved in tax advice.

However, she said brokers needed to understand a raft of details including which Standard Industrial Classification Codes (SIC) are acceptable to a lender for a special purpose vehicle (SPV) or the type of guarantee the lender needs – personal, a debenture or a floating charge.

 

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