Landlord action to mitigate higher tax costs will lead to a lower level of BTL remortgage transactions in the future, according to new research.
Paragon’s PRS Trends Report for Q1 2019 has revealed that landlords were now prioritising measures to bolster financial strength over portfolio expansion.
Highlights from the survey include:
- the proportion of landlords looking to purchase property has fallen from between 15–20% in 2015 to just 7–10%
- average portfolio gearing has fallen from 40% in 2014 to 33%, with landlords who have three or more properties borrowing 36% of their portfolio value on average
- mortgage costs as a proportion of rental income were down from the 30% recorded at the beginning of 2017 to 27%
- BTL house purchase transactions in 2018 were down by 34% compared with 2014, while remortgage transactions were up 76% over the same period
John Heron, director of mortgages at Paragon (pictured above), said: “The shift in focus from portfolio expansion to financial strength has driven a surge in BTL remortgaging, with lower interest rates and longer initial fixed periods helping landlords [to] reduce finance costs and lock in greater certainty.
“However, it also extends the product maturity cycle, guaranteeing a reduction in the scale of opportunity to refinance buy-to-let mortgage deals over the next few years.”
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Maria Harris set to leave Atom bank
Atom bank has revealed that its director of retail mortgages Maria Harris (pictured above) is set to leave to become an independent consultant in the mortgage market...
Handelsbanken reports 6% surge in UK lending
Handelsbanken has reported a 6% increase in UK lending to £21.4bn in Q2 2019, compared with Q2 2018...
Tandem reveals development of new mortgage product
Tandem Bank has revealed that it’s developing a new mortgage product which will be suitable for first-time buyers...
Goldman Sachs invests €25m in Raisin
Goldman Sachs has provided €25m of funding to Raisin...
The power of partnerships
Since our launch in September 2015, we have proven our ability to innovate in the UK savings market, which has been recognised with various savings awards...
N26 rebrands premium account
Mobile bank N26 has launched a premium accounts product named N26 You...
Sesame adds Investec Private Bank to panel
Investec Private Bank has been added to Sesame’s panel...
84% would change financial services provider due to poor complaints experience
More than eight out of 10 customers (84%) claim that they would change financial services provider due to a poor complaints experience, according to the latest research...
City of London Group posts £3.6m pre-tax loss after absorbing banking licence costs
City of London Group PLC (COLG) has reported a pre-tax loss of £3.6m for the year ended 31st March 2019 after absorbing £1.7m of costs associated with applying for a UK banking licence and acquisition of Acorn to Oaks Financial Services Limited...
Redwood Bank appoints two new BDMs
Redwood Bank has appointed Dan Carter (pictured above, left) and Sue Young (right) as BDMs...
Sainsbury’s Bank updates residential and BTL mortgage ranges
Sainsbury’s Bank has updated its residential and BTL mortgage ranges...