Buy to let tax change triggers rush to mortgage intermediaries
The imminent mortgage interest tax relief changes coming into effect in April has triggered a surge in the number of mortgage applicants using intermediaries.
There was a 26 per cent rise in the average number of mortgage enquiries received by intermediaries in Q4 last year according to the Intermediary Mortgage Lender’s Association’s tracker index. Each intermediary typically received 58 enquiries, rather than the 46 received in the previous quarter.
“It’s unsurprising that there was an increase in the numbers of borrowers seeking expert advice in the final quarter of 2016, given that the changes to buy to let underwriting standards and mortgage tax relief were looming large on the horizon” explains Peter Williams, executive director of IMLA.
“As the layers of regulation in the market become increasingly complicated, and the number of products increase, the intermediary market continues to play a very important role in the provision of mortgage finance to a variety of borrower types” he says.
The quarterly report follows mortgage applicants’ journey through the approval process from their initial enquiry to completion. The tracker divides the results by firms dealing with first time buyers, owner-occupier home movers, remortgagors, buy to let borrowers and applicants for specialist loans.
Data from the CML shows that the combined volume of house purchase and remortgage buy to let transactions grew by only 1.4 per cent from Q3 to Q4 – indicating the scale of the leap for those using intermediaries.