Brokers predict 2011 buy-to-let bounce

Paragon's Financial Adviser Confidence Tracking Index (FACT), a panel-based survey of mortgage brokers, found that 46 per cent of intermediaries expect to introduce more buy-to-let mortgage business during the year. Nearly two out of 10 (17 per cent) expect to see an increase in buy-to-let business of 10 per cent or more during 2011, with 29 per cent expecting to do up to 10 per cent more business.
Paragon's FACT research also showed that 51 per cent of mortgage brokers reported an improvement in the availability of buy-to-let finance during the final quarter of 2010, with 46 per cent expecting a further improvement during the first quarter of 2011.
The buy-to-let market showed strong signs of recovery in 2010 with the launch of several new lenders and Paragon's return to the market. The year saw the number of products and lenders increase, as well as a greater level of innovation, leading to renewed competition and choice in the sector. The Council of Mortgage Lenders is expected to confirm that gross advances increased during 2010 when it announces its final year figures for the buy-to-let market in February1.
John Heron, Paragon Mortgages' managing director, said: "We are clearly now in a more buoyant phase for the buy-to-let market – 2010 was the turning point for the sector and it enters this year on the front foot and with confidence. As approximately nine out of 10 buy-to-let mortgages are introduced via intermediaries, it is extremely encouraging that nearly half of brokers expect to increase business levels in 2011. This, in turn, should attract a greater number of lenders and borrowers to the market."
He added: "Intermediaries are encouraged by the growing number of lenders in the sector, which is stimulating much-needed competition and product innovation. Meanwhile, there is a clear shift in UK housing trends towards privately renting and landlords are looking to benefit from the excellent levels of tenant demand and strong rental yields."