View more on these topics

Two-thirds of BTL loans are remortgages

Remortgaging accounts for two-thirds of the buy-to-let market due to record low mortgage rates, according to Mortgages for Business.

The firm’s latest Buy to Let index shows 66 per cent of ‘vanilla’ buy-to-let loans were remortgages in the first quarter of 2015, rising from 62 per cent in Q4 2014. The proportion for houses in multiple occupation was even higher, at 73 per cent, up from 70 per cent in the previous quarter.

For multi-unit freehold blocks, remortgaging accounted for 89 per cent of loans in Q1, compared to just 42 per cent in Q4 2014.

Mortgages for Business managing director David Whittaker says: “Record low mortgage rates are driving wave upon wave of landlords to reassess their finances. A great deal agreed last year may be uncompetitive by today’s standards.

“So this stampede is completely rational – it represents a charge by landlords to make the most of an unprecedented economic situation.”

The buy-to-let sector contrasts with the residential sector, where remortgaging accounted for 32 per cent of new advances in February, the Council of Mortgage Lenders’ latest figures show.

John Charcol senior technical manager Ray Boulger says: “In the buy-to-let market there is an added reason to remortgage that isn’t there in the residential market and that is extracting capital to expand your portfolio. Particularly people who have properties in London and the South-east, in the past three years they will have had more equity and therefore there is more reason to remortgage because, in my cases, that is the only way you can extract more capital.”

He adds: “Also, there will be a higher number of mortgage prisoners in the residential market.”

Average LTVs have also crept up in the past three months. For vanilla buy-to-let, the average LTV stood at 66 per cent at the end of Q1, compared to 63 per cent at the end of Q4 2014.

The Buy to Let index also shows the average LTV for HMOs rose to 70 per cent in Q1, from 64 per cent in Q4 2014.

Whittaker says: “Remortgaging is often done for the purposes of raising extra capital and this is reflected in higher LTV ratios. However, this is by no means an unwelcome trend – and could in turn open the door to more new purchases and investment by landlords.”



UK dodges deflation… but only for now, says economist

UK inflation remained at 0 per cent last month but the measure for core inflation decreased to a nine-year low, according to the latest data from the Office for National Statistics.  CPI stayed at 0 per cent in March following the surprise drop in February from 0.3 per cent.  However, core inflation – a measure […]


Lenders warned on TCF after FOS mortgage age ruling

Mortgage lenders could fall foul of treating customers fairly rules if they apply generic lending criteria following a Financial Ombudsman Service ruling against HSBC, experts warn. The FOS has upheld a complaint against the bank for unfairly rejecting a mortgage application on the grounds of age in the first case of its kind. A couple […]


Clydesdale fined £20.6m over PPI complaints

The FCA has fined Clydesdale Bank £20.6m over serious failings in the way it handled payment protection insurance complaints – the largest fine imposed to date for PPI-related failings. The FCA says in mid-2011 Clydesdale implemented inappropriate policies that meant its PPI complaint handlers were not taking into account all relevant documents when deciding how […]


Barclays to launch fee-free two-year fix at 1.85%

Barclays is set to launch a fee-free two-year fixed rate at 1.85 per cent. The product will be available up to 60 per cent LTV and on loans between £5,000 and £1m. Tomorrow, the lender will also reduced selected 70 and 75 per cent LTV five-year fixed rates. A 70 per cent LTV deal will […]

Health - thumbnail

Absence management systems gone AWOL from UK’s SMEs, reports Jelf

A quarter (23 per cent)* of the UK’s small to medium-sized enterprises (SMEs) do not have an absence management system in place, according to new research from Jelf Employee Benefits. Despite 69 per cent* of organisations having a system in place, three-quarters (75 per cent) report that it is not providing them with sufficiently empowering absence or health data to inform an effective wellbeing programme.


News and expert analysis straight to your inbox

Sign up