Mixed fortunes for buy-to-let sector - Mortgages - News - Moneyfacts


Mixed fortunes for buy-to-let sector

Mixed fortunes for buy-to-let sector

Category: Mortgages

Updated: 27/11/2009
First Published: 26/11/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

There is evidence of a split in the buy-to-let market, with the number of landlords extending their portfolio increasing but remortgaging activity tumbling.

Almost half of landlords (48 per cent) obtained a mortgage to extend their portfolio in the third quarter of 2009 – a vast improvement on quarter four of 2008, when 31 per cent of landlords said they had taken out a buy-to-let mortgage to do so.

It is the highest percentage to have said they were expanding their portfolio since Paragon mortgages started the Financial Adviser Confidence tracker index in 2001.

'It is encouraging that landlords are now adding to their portfolios. We haven't experienced the mass sell-off of buy-to-let property during the recession that some commentators were predicting, but buying activity has been subdued," said John Heron, managing director at Paragon Mortgages.

"As house prices have stabilised, landlords now obviously believe that it is a good time to start expanding before house price inflation picks up again."

However, the index also found that 39 per cent of landlords obtained a buy-to-let mortgage through a financial adviser for remortgage purposes in the three months to September, the lowest level for a quarter since the first three months of 2007.

"Landlords are not remortgaging for two reasons - they can't because of the low number of mortgages available and there is little incentive to do so because the reversion rates when coming off an introductory deal are so attractive due to the low Bank of England base rate and libor," Mr Heron commented.

"Landlords are happy to stay with their existing lender and we think this will remain the case for the foreseeable future."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.

Confidence among “second steppers” is on the rise

We all know how difficult it can be taking that first step on the ladder, but what about the second step? In many cases, getting onto the next rung can be just as challenging, but happily, confidence among this cohort appears to be on the rise.