More buy-to-let landlords applying for remortgages

Applying for remortgages on the up

More buy-to-let landlords are remortgaging their property because of attractive low rates, according to a new study.

The latest Mortgages for Business Complex Buy to Let Index found that during the first quarter of the year, 66 per cent of buy-to-let loans were for remortgages. Only 34 per cent were for new purchases.

This is up four per cent compared to the previous quarter and is indicative of the presently favourable market conditions.

“Record low mortgage rates are driving wave upon wave of landlords to reassess their finances,” commented David Whittaker, managing director of Mortgages for Business.

“A great deal agreed last year may be uncompetitive by today’s standards. So this stampede is completely rational as it represents a charge by landlords to make the most of an unprecedented economic situation."

The expert continued by saying that landlords tend to remortgage to raise extra capital. As the index suggests, this is evident in the higher loan to value ratios.

“However, this is by no means an unwelcome trend and could in turn open the door to more new purchases and investment by landlords,” Mr Whittaker concluded.

The study also showed that the rental market is in robust health, which it attributes to a “resurgent jobs market”.

If things continue as they are, then landlords will no doubt feel confident about making further investments.

The only thorn in this, experts say, is the potential uncertainty emanating out of the General Election in May.

Most significantly, the fact that none of the major political parties are demonstrating an ability to win an outright majority has some people concerned.

Mr Whittaker said: “More of an immediate worry is the far more general risk of a power vacuum after an election barely three weeks away, the associated effect on the financial markets and ultimately on mortgage rates.”