Brokers' buy-to-let remortgages at five year low
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The buy-to-let remortgage business being handled by brokers has has fallen to its lowest level for five years in early 2010.
Paragon Mortgages’ panel of brokers found remortgaging accounted for 28% of buy-to-let business during the first quarter of this year, down from 30% in the final quarter of 2009.
It is the lowest level since the first quarter of 2005 and the fifth consecutive quarterly fall.
Meanwhile first time landlords made up a greater proportion of the buy-to-let industry for the second quarter in a row, now counting for more than a fifth of business.
And existting landlords are not extending their portfolios as much with their proportion dropping from 52% in the last quarter of 2009 to 45% this year.
But landlords buying another property to replace one sold did increase form 2% to 5%.
Brokers are handling less buy-to-let business by 1%, now standing at a 13% market share.
John Heron, Paragon Mortgages’ managing director, says: “There is little incentive for landlords to move from their existing lender, and even if they wanted to there is a serious lack of buy-to-let mortgage products available.
“The low interest rate environment means that most landlords with a mortgage are financially better off staying on their reversionary rate with their existing lender rather than remortgaging to another lender. If they did want to move, their options are very limited. Moneyfacts figures show there are only approximately 300 buy-to-let mortgage products available today, compared to over 3,500 at the market’s peak.”
Heron adds: “It is positive that first-time landlords are coming back into the market, however, as the stock of private rented sector property is coming under increasing strain. It is important that lenders encourage landlords who take a long-term approach to their investment, rather than speculators.”
