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Landlords stay committed to buy-to-let with more choice of mortgage products

2-minute read

Mollie Millman

26 February 2019

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Landlords remain committed despite all the regulatory and tax changes that have taken place, new figures suggest.

Latest data from UK Finance found that while the number of mortgages obtained for buying new investment properties has dropped, the number of remortgages is higher than previously.

It suggests that existing landlords are committed to the sector and are not quitting as feared following the regulatory and tax changes. They’re keeping hold of their properties and continuing to raise finance against them.

The tax changes include the reduction of tax relief that landlords can claim and the introduction of a 3 per cent stamp duty surcharge on second homes and buy-to-let properties.

Rise in buy-to-let remortgage numbers

UK Finance reported that 12,400 new buy-to-let remortgages were completed in December 2018, which is 23.3 per cent more than in the same month a year earlier. By value, this was £2 billion of lending in the month, 25 per cent more year-on-year.

During the whole of 2018, 169,100 new buy-to-let remortgages were completed. This is 11.2 per cent more than in 2017. The £27 billion of new lending in the year was 11.6 per cent more than in 2017.

Jackie Bennett, director of mortgages at UK Finance, said: "Demand for new buy-to-let purchases continues to be dampened by recent tax and regulatory changes.

“However, the number of buy-to-let remortgages reached a record high of almost 170,000 last year, suggesting many landlords remain committed to the market.”

Mortgages for new investment purchases

By contrast, the number of mortgages for new buy-to-let investments has dropped.

UK Finance claimed there were 5,100 new buy-to-let purchases completed in December 2018, some 5.6 per cent fewer than in the same month a year earlier.

And during the whole of 2018, there were 66,400 new buy-to-let home purchases completed, some 11.5 per cent less than in 2017.

High number of mortgage products

Landlords’ ability to remortgage has been helped by an increase in the variety of mortgage products available to them.

Figures from Moneyfacts claimed that numbers are at their highest level since the credit crisis a decade ago.

Today, landlords have a choice of 2,162 buy-to-let mortgages, meaning that the number hasn’t been higher than this since October 2007, when 3,305 products were available.

Moneyfacts’ Darren Cook said: “It is encouraging that buy-to-let landlords have more mortgage choice than they have had at any time in almost 12 years.

“Total product numbers have increased by 397 in the past year and by 706 in the past two years to stand at 2,162 products today.

“Despite ongoing uncertainty in the property market, providers are not shying away from offering landlords a greater choice of products.”

Are you staying with the buy-to-let market despite economic uncertainty? Let us know in the comments below.

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