There has been a rise in landlord clients applying for buy-to-let mortgages to expand their rental property portfolio, according to mortgage intermediaries.
Paragon Mortgages’ quarterly FACT survey asked intermediaries for their feedback on the mortgage market but also for their views on landlord demand, buy-to-let application levels and the availability of buy-to-let mortgage finance.
Those who took part in the second quarter survey reported the most popular reason for landlords applying for a buy-to-let mortgage was to expand their portfolios (44%). This is an increase on the first quarter (40%) and also the highest level achieved in the past 12 months.
The number of landlords looking to remortgage also rose in the second quarter from 31% to 32%, whilst the number of first-time landlords applying for a buy-to-let mortgage fell from 23% to 20%.
Those intermediaries surveyed were asked for their views on the current level of demand from landlords. 53% said they would describe demand as stable; 22% said demand was strong.
When asked more generally about the levels of mortgage business introduced during the quarter, intermediaries reported an increase to 16.7 (15.6 in the first quarter).
Intermediaries also gave the following breakdown of mortgage business handled in the second quarter:
- 36% – remortgages
- 26% – next-time buyers
- 20% – buy-to-let
- 16% – first-time buyers
“Levels of buy-to-let mortgage business are healthy at the moment, but could be better,” said John Heron, managing director of Paragon Mortgages.
“The market is still being affected by the wider financial markets and factors such as the Eurozone.
“However, we have made great strides in recent months and it is encouraging to see the percentage of landlords expanding their portfolios increasing.”