Almost half of brokers boost BTL business in Q1

14 April 2011 | By Natalie Thomas

Paragon’s Financial Adviser Confidence Tracking Index, a panel survey of approximately 200 intermediaries, found that 46% of respondents reported higher levels of buy-to-let business during the period compared with the fourth quarter of 2010.

Nearly one in five intermediaries reported an increase in buy-to-let business of more than 10% during the period, whilst 13% recorded increased business levels of between 6% and 10%.

Meanwhile, 15% said buy-to-let business was up by 5%, whilst 45% said that buy-to-let business levels had remained unchanged during the first three months of the year.

Paragon’s FACT Index also showed that 53% of intermediaries reported improving credit conditions in the buy-to-let market during the first quarter, with wider product availability and easing criteria levels. Looking forward, 56% of intermediaries forecast that product availability will improve further during the second quarter of 2011.

The distribution of buy-to-let mortgages introduced by financial advisers in the first quarter in terms of their LTV ratios shows the average LTV was 65%. FACT showed 25% of mortgages had an LTV up to 60%, 33% were between 61% and 70% LTV, 31% were between 71% and 75% LTV, and 11% over 75% LTV.

John Heron, Paragon Mortgages managing director, says: “These figures demonstrate intermediaries’ growing confidence in buy-to-let. Nearly half of intermediaries reported an increase in business levels during the quarter, with one in five increasing their buy-to-let business by more than 10%.

“Landlord demand is clearly strong and buy-to-let finance is becoming more readily available to meet that demand. Although we are obviously not operating at ‘normal’ market levels, buy-to-let is on the road to recovery.”

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