There has been an increase in the number of buy-to-let mortgages being taken out in the last year, according to figures from UK Finance.
Data from the banking trade body revealed the number of landlords completing on purchases using buy-to-let mortgages nudged up by 3.6% in December 2019, compared to the same month of the previous year.
It comes at a time when landlords have been stung with a series of tax and rule changes which were expected to prevent many from making further investments.
At the same time the number of first-time buyer mortgages taken out increased by just 0.3% in the same time and the number of home movers rose by 3.2%.
Mark Harris, a mortgage broker at SPF Private Clients, said borrowing did, generally, tend to pick up in December because buyers and sellers wanted to get deals done before the end of the year.
However, he thought it significant landlords had continued making purchases despite the challenging environment.
He said: “Even buy-to-let saw an uplift in the number of new loans taken out, a rare event given the tougher tax and regulatory situation, which has deterred novice landlords in particular.
“Clearly, though, there are investors who are still spotting opportunities in the market. Once the Boris Bounce fully filters through to these numbers, we will get more of an idea as to whether the market has actually turned a corner.”
Portfolio landlord
According to a survey by specialist lender, Aldermore, a quarter of landlords felt regulatory changes were the biggest threat to their investment.
But the lender’s data also found there were a number of locations in the UK which were strong for investment – with Oxford and the South East performing particularly well.
Damian Thompson, group managing director – retail finance at Aldermore, said: “It is encouraging that 2019 finished with the strongest quarter of the year for buy to let volumes, but the sector remains in a ‘new normal’ since the regulatory change, with a continued split between muted house purchase activity and more buoyant remortgaging. However, there are many reasons to be optimistic for 2020.
He added: “Landlords have become more diversified in their needs, with many moving away from a growth strategy focusing more on portfolio management, and the sector is gradually adjusting to the shift towards professionalisation.
“Whatever a landlord’s future intentions, the increase in regulatory measures and more complicated mortgage applications means specialist lenders are now more vital to the market.”
I think Buy to Let business mortgage has its fair share of jargon so all information is clearly presented so you understand rental calculations and requirements of the lender.