Q2 sees buy to let remortgage surge
- Published: Thursday 18 July, 2013
- Category: Housing market
- By: Ben Gosling
- Updated: Friday 08 July, 2016
Figures from the second quarter of 2013 (April to June) have shown that a significantly higher proportion of buy to let lending has been for remortgaging rather than for purchasing.
Between the improving affordability and availability of buy to let mortgages (there are 31 more buy to let products available on the market than three months ago, despite the number of lenders remaining static), and the warnings that interest rates may soon rise, landlords appear to be currently focusing on switching their buy to let mortgage to a more competitive rate.
All property types but ordinary residential (‘vanilla’) buy to lets saw remortgages increase as a proportion of overall lending – particularly semi-commercial property (such as shops with flats above them), which saw an increase from just over half of all mortgages in Q1 to nine out of every ten in Q2.
It is possible that new entrants are also being deterred from entering the market, as recent survey data from a specialist buy to let lender has suggested.
Paragon’s Quarterly Trend Survey showed that around three in five landlords plan to avoid buying in areas where compulsory, selective or additional licensing requirements are imposed by the local council. Furthermore, one in four respondents believes that selective licensing will put off new investors.
In January, the East London borough of Newham became the first council to introduce compulsory licensing for private landlords; following this, as the Guardian reported in May, a third of councils began to consider increasing their own regulation.
Several mainstream buy to let lenders are known not to grant mortgages on properties that will require additional licensing. For help finding a mortgage for a property that requires a special license, including a house in multiple occupation (HMO), contact us.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.