Rise in remortgages as landlords raise capital

Landlords raising capital contributed to a surge in BTL remortgage business in Q2 2020, according to research by Paragon Bank.

Mortgage intermediaries indicated that remortgages accounted for 60% of BTL cases in Q2, up from 48% in the previous quarter, as new lending for house purchases fell as a result of lockdown.

The ability to secure a better interest rate was the reason 54% of landlords gave for remortgaging.

However, 30% of landlords said they remortgaged to raise capital.

Landlords who own four or more properties accounted for the highest proportion of BTL mortgage business, rising from 25% in Q1 to 28% over the last three months. 

Moray Hulme, director for mortgage sales at Paragon, said: “These findings are encouraging for the sector because they show that landlords have not only been resilient during the recent challenges, but have been planning for the future. 

“The data also supports the idea that there is a shift towards a professionalisation of the private rented sector. 

“This is positive because a higher number of professional landlords has been shown to correlate with higher standards in the sector.”

The specialist lender produces the index on a quarterly basis to better understand the market and gain a broker perspective.

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