More landlords than homeowners have remortgaged in the third quarter of 2015, according to the latest Complex Buy to Let Index from specialist brokers Mortgages for Business.
The proportion of buy-to-let loans for remortgages was 66 per cent, against just 34 per cent for new home purchases. This means buy-to-let has outpaced new home loans for the fourth consecutive quarter.
The number of buy-to-let mortgage products landlords can choose from has also increased in the third quarter and is nearing 1,000 available offers. The number of products grew 11 per cent against the second quarter of this year and 35 per cent on the third quarter of the last and now stands at 953.
David Whittaker managing director of Mortgages for Business, comments: “The number of new mortgages coming onto the market has rocketed in recent months. There is huge interest in mortgages suitable for limited companies as landlords take advice from their accountants.
“Meanwhile, as rents fail to keep pace with racing property prices, yields are continuing to plateau. Returns on vanilla buy to let have now fallen to the 5% mark. Landlords with reasonable borrowing costs and a strong portfolio of these sorts of properties will still be making a solid income from such investments – but this changes the case for those considering new purchases.”
Whittaker continues, “There is a change of mood from landlords. Recent unfriendly noises from the Government and Bank of England have contributed – but mostly this represents a natural cooling in the buy to let industry after an exceptionally strong first half of 2015.
“Consolidation is the order of the day. Landlords are taking full advantage of record low borrowing rates while this lasts. The fact that landlords are choosing in vastly larger numbers to remortgage rental property rather than purchase shows they are looking to get a competitive fixed rate mortgage.”
