Landlord remortgaging close to record levels

The proportion of landlords remortgaging is close to record levels, according to the latest research.

Paragon’s financial adviser confidence tracking (FACT) index has revealed that intermediaries have reported that 52% of buy-to-let mortgage cases in Q1 2018 were for landlords looking to remortgage.

This is up from the 29% reported in Q1 2015 prior to that year’s Summer Budget, which included the announcement of a wide range of tax changes.

During Q1 2018, intermediaries said that they had seen a drop in the proportion of mortgage applications from first-time landlords, down from 19% to just 13% of the total.

In addition, there had also been a fall in landlords remortgaging to raise funds to extend their portfolios, from 39% to 22%.

In the same period, 60% of landlords said that securing a better interest rate was their primary objective, compared with 30% of landlords who said that raising capital was their main priority.

John Heron, managing director of mortgages at Paragon (pictured above), said that there was a wide range of factors contributing to the surge in landlords remortgaging at the moment.

“These include the expiry of the initial term on mortgages taken out ahead of the stamp duty changes for second properties, the expectation of rate rises on the horizon and a desire to minimise interest costs in the face of new mortgage affordability rules.

“It will be interesting to see the extent to which mortgage applications for purchases and portfolio extensions increase once these factors have played out.”

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