Buy To Let Remortgage Loans At Lowest Level For Two Years
Although we are starting to see some healthy signs of recovery within the housing market sector, with increased property sales and more home owner loans and even buy to let new loans being offered, the remortgage market in the UK is still suffering, with the number of remortgage loans continuing to fall as borrowers remain on their existing lenders’ standard variable rate.
The buy to let sector of the property market has been hit particularly hard following the credit crunch and although there are now some increases in the number of new buy to let loans, the remortgage market in this sector has reached its lowest point in two years.
The news comes from the specialist buy to let lender, Paragon Mortgages, who have just returned to offering loans to new customers after an absence of almost two years. Paragon’s research shows that, although many professional landlords are taking out an increasing number of new buy to let loans in order to expand their property portfolios, very few are choosing to switch their existing loans to any new products.
This is largely due to the fact that the reversionary rates on their existing loans are usually much cheaper than any alternative loan product which is currently on offer in the market place.
John Heron of Paragon Mortgages said “It is encouraging that landlords are now adding to their portfolios. 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. 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.
However, product availability in the buy to let market remains low, with only two lenders writing any significant levels of new business. Therefore, it is too early to start talking about recovery of the sector because investors continue to suffer from a severe lack of competition in the mortgage market.”
