Buy-to-let is once again seeing some growth. Figures from the Council of Mortgage Lenders show the value of new buy-to-let loans rose 21% in Q2.
Interestingly, remortgages, accounted for 65% of the increase between Q1 and Q2. Remortgaging in buy-to-let peaked in 2007, often used by landlords to release equity in properties that had benefited from capital appreciation to use as seed capital for portfolio expansion.
Landlords are again on the acquisition trail and are remortgaging unencumbered or low-geared properties to raise capital to fund deposits for more property investments.
Since the start of 2009, remortgaging in the buy-to-let sector has doubled and is now higher than lending for purchase.
Our survey of intermediaries showed the two main reasons clients remortgaged in Q2 were to raise capital or secure a better rate.
On average, almost five out of 10 buy-to-let remortgages handled by the brokers surveyed were for capital raising, while 35% was to achieve a better rate of interest.
With renewed expectation of a surge in property values and tenant demand in the private rented sector at record levels, landlords will be looking to finance the growth of their portfolios through the release of equity on existing properties.
For brokers this presents opportunities to boost sales and return to their databases to contact those landlord customers who may have been inactive over the past three or four years.