Novice landlords prop up B2L sector
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More landlords entered the buy-to-let market for the first time in Q1 2010, as buy-to-let remortgage business continued to fall.
Research from Paragon Mort-gages shows that first-time buy-to-let investors represented 21% of new buy-to-let loans in Q1 2010, based on a poll of around 200 advisers. In December they made up just 16% of new buy-to-let deals.
Meanwhile, the proportion of buy-to-let remortgages has fallen for the fourth consecutive quarter, from 30% in Q4 2009 to 28% in Q1.
A spokesman for Paragon says: “The rise in first-time landlords represents a proportion of new business and reflects a reduction in buy-to-let remortgaging.”
But Geoff Laird, principal of Buy to Let Funding Services, says: “With buy-to-let tracker rates carrying premiums of up to 4.75% above the Bank of England base rate any dramatic rate rise could be a disaster for virgin investors.
“I question whether this is the right time to encourage first-time landlords. Without professional advice they could become a new batch of lambs to the slaughter.”
