News

Paragon Mortgages’ Financial Adviser Confidence Tracker (FACT) Index, a panel-based survey of mortgage brokers, found that 39% of landlords obtained a buy-to-let mortgage via a financial adviser for remortgage in the third quarter of 2009, the lowest level recorded since early 2007.

In contrast, FACT found that 48% of landlords obtained a mortgage to extend their portfolio in the third quarter of 2009, a rapid recovery from the final quarter of 2008, when just 31% of landlords were taking out buy-to-let mortgages for expansion purposes.

“We haven't experienced the mass sell-off of buy-to-let property during the recession that some commentators were predicting, but buying activity has been subdued,” said Paragon Mortgages’ Managing Director, John Heron.

“As house prices have stabilised, landlords now obviously believe that it is a good time to start expanding before house price inflation picks up again.”

The reduction in remortgaging has positively affected the bank’s willingness to lend for buy-to –let landlords. Figures from the Council of Mortgage Lenders (CML) show that lending increased by 10% in the three months before September this year, attributing the growth to landlords looking to buy properties rather than remortgage.

“There has never been a better time to capitalise on the buy-to-let market,” Jim Parker, a landlord of 15 years and spokesman for the National Landlords’ Association (NLA) in Scotland, told The Times.

“There is virtually no return from the banks, but there are some great bargains out there. Housing is in short supply and rents are increasing. If you have the deposit to put down, now is the time to buy.”