BTL remortgage business plummets to five-year low
The proportion of brokers' buy-to-let remortgage business fell to its lowest level for five years in Q1.
The latest data Financial Adviser Confidence Tracking Index from Paragon Mortgages reveals that remortgaging accounted for 28% of brokers' buy-to-let business during the period, down from 30% in Q4 2009.
This is the fifth consecutive quarterly fall and the lowest level since Q1 2005.
Meanwhile, the proportion of first-time landlords rose for the second consecutive quarter, accounting for 21% of broker's buy-to-let business. The proportion of first-time landlord business has been lower than the level of remortgaging since Q1 2006.
The proportion of business from landlords extending their portfolios also fell during the period, down from 52% in Q4 2009 to 45% during Q1 2010, while property substitution, where the landlord is purchasing property to replace one being sold, rose from 2% of business to 5%.
John Heron, Paragon Mortgages' managing director, says: "There is little incentive for landlords to move from their existing lender, and even if they wanted to there is a serious lack of buy-to-let mortgage products available.
"The low interest rate environment means that most landlords with a mortgage are financially better off staying on their reversionary rate with their existing lender rather than remortgaging to another lender.
"If they did want to move, their options are very limited. Moneyfacts figures show there are only approximately 300 buy-to-let mortgage products available today, compared to over 3,500 at the market's peak."
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