Support, Advice and Experience within the Property Market

Buy-to-let mortgage sales buck trend

From Robert Ulph on November 26, 2019

With all indications showing that the housing market will remain subdued until the General Election, Christmas and Brexit are all over, it was encouraging to see buy-to-let (BTL) mortgage sales bucking the general trend in the latest research.

Since 1995 Paragon, one of the leading providers of buy-to-let mortgages has published a quarterly review (the Financial Advisor Confidence Tracking Index – FACT) which highlights both the views on the current performance of the mortgage market and on developing trends.

While the latest data has revealed an overall slowdown in mortgages, which is no great surprise, buy-to-let mortgages are reported to have remained stable and are predicted to see an expected growth in the next quarter. The report states that brokers expect to do 1% more buy-to-let business in the next 12 months. This is a modest increase but it is still the highest growth in the last 12 months and the latest statistics also show that buy-to-let mortgages grew as a proportion of overall mortgage sales; making up 17% of mortgages introduced in the quarter (Q3 2019) which was up 2% from the previous quarter. 

In addition, to give a further boost to the buy-to-let landscape, of the business completed in 2019, the latest quarter (Q3) saw first-time landlords grow too – from 11% to 13%.
Interestingly to see also this month that other providers have expanded their buy-to-let mortgage offers. For some this has been into new regions (LendInvest, for example, has expanded its BTL offering into Scotland) while other mortgage providers have unveiled some great new offers. For example, Foundation Home Loans offer a new product which gives a 75% loan-to-value (LTV) two-year fix at 2.89%. 

At Pennington, we know how strong the local rental market is and are experiencing the increasing supply and demand shortfall. This all means that rents are healthy and if you are looking to invest for the first time or grow your portfolio, I would always advise – and can help you – to do your research.

I have seen too many times BTL properties bought almost on a whim. Investors may have bought in a certain area because they liked it, but it might not mean this is the best area for renting the property they have. I always look to advise how to get the best return on their investment in terms of where to buy, what to expect to pay for the property and what return to expect in rental income.

For many, the lettings market can feel like a minefield, as there are many potential pitfalls with letting a property. If you are not up to speed with legislation and the changing implications of owning a BTL property, you could leave yourself exposed to penalties and incur hefty fines and financial losses as a result.

As always, if you would like any advice on this or anything else on the local property market, please do not hesitate to contact me.