The number of five-year fixed buy-to-let mortgages completed in the six months to the end of March 2016 was 121 per cent higher than the same period a year earlier, as investors rushed to buy before the new three per cent tax took effect, Paragon Bank said.
The lender found that around half of advisers are set to turn their attention to remortgage business after the stamp duty holiday finishes at the end of March.
Fresh buy-to-let underwriting rules in 2017 provided a further boost to five-year fixes, which have since grown in popularity.
Moray Hulme, Paragon director for mortgage sales (pictured), said: “There was a significant increase in five-year fixed rate business written in the run-up to the introduction of a three per cent buy-to-let stamp duty surcharge in April 2016 and those deals are due to expire in the coming months.
“Brokers are extremely busy getting deals over the line ahead of the end of the stamp duty holiday, but the prospect of remortgage business will give them some hope that they won’t face a complete cliff edge of business as we head into April.”
Brokers surveyed by Paragon also earmarked short-term finance and holiday lets, as favourable areas for future business.
However, around six in 10 advisers think that case volumes will be negatively affected after the stamp duty break ends.
Hulme added: “The stamp duty break has provided welcome stimulus to business and has helped the buy-to-let market bounce back. Once the scheme ends we expect the landscape to be quite different when compared to the one we have seen over the past few months, with many expecting cases to reduce significantly.
“While we recognise that this does result in some uncertainty for the industry, we should be reassured when we remember how mortgage application numbers recovered after taking a dip in 2016 when new rules meant landlords were required to pay an additional three per cent stamp duty on property purchased to rent over and above standard rates.”