BTL remortgaging spike to come in 2022 ‒ Paragon

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  • 04/01/2022
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BTL remortgaging spike to come in 2022 ‒ Paragon
The coming 12 months will see a sharp increase in buy-to-let remortgage activity, Paragon Bank has predicted.

 

The specialist lender pointed to the fact that 2022 marks five years since the introduction of new underwriting standards by the Prudential Regulation Authority (PRA), which led to a notable rise in the number of borrowers opting for longer fixed term rates.

Paragon said it was putting plans in place to ensure it was well equipped to handle a wave of maturing five-year fixed rates.

It pointed to industry data which found that the number of five-year fixes written between December 2016 and January 2017 jumped from 3,008 to 4,167, with subsequent increases meaning it has rarely been below 10,000 since.

Moray Hulme (pictured), mortgage sales director at Paragon Bank, said that the new underwriting standards from the PRA pushed lenders to take a “more holistic approach” to assessing affordability.

He continued: “This correlates with 2017 seeing a significant increase in the volume of mortgages fixed over five years. As a result, we’re anticipating strong levels of remortgage business throughout the next year.

“This presents a fantastic opportunity for brokers to generate business and, with the process often involving additional borrowing, we recommend that they do this at the earliest opportunity.”

The lender made a handful of other predictions about the changing shape of the landlord market this year, including continued pressure on supply levels of rental properties and that more lenders will look to launch ‘green’ mortgage deals which support landlords with more energy efficient portfolios.

A study this week from Foundation found support among borrowers of all stripes for more mortgage deals which deliver lower interest rates to owners of properties with good energy performance certificate ratings.

Hulme concluded: “The sector has shone during another incredible year and with 2022 shaping up to be equally eventful, we look forward to working with our industry partners to support landlords in providing good quality, affordable homes for millions of tenants in the UK.” 

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