Hefty Rise In UK Landlords Choosing To Re-Mortgage
A banking group’s latest survey claims that there is huge rise in the number of UK landlords opting to remortgage their properties. The group’s intermediaries who took part in the survey said that in the first three months of this year, 52% of BTL applications were for remortgaging.
This is a steep rise when compared to 2015’s 1st quarter of BTL applications when it was just 29%. However this was before the infamous summer budget announced the government’s onslaught on the private rented sector with the phasing out of the tax relief on buy-to-let mortgage interest followed by the impending Stamp Duty 3% surcharge in April 2016.
During the same period, the banking group’s intermediaries reported that they had experienced a fall in BTL mortgage applications by new landlords from 19% down to 13%. This went hand in hand with a drop in landlords remortgaging to seek capital to buy additional BTL properties, this had dropped from 39% down to 22%.
Those landlords thinking of remortgaging of which those wanting to get a more favourable interest rate was the highest ever level (60%) in the first three months of this year. In a direct comparison with 2015’s Q1 when landlords looking to remortgage were equally split between securing a better interest rate, and to raise funds for additional properties. This is the widest gap between the priorities of getting a better interest and raising capital since 2013.
John Heron, Managing Director of Mortgages of the banking group, said: “There’s a wide range of factors contributing to the surge in landlords remortgaging at the moment. These include the expiry of the initial term on mortgages taken out ahead of the stamp duty changes for second properties, the expectation of rate rises on the horizon and a desire to minimise interest costs in the face of new mortgage affordability rules. It will be interesting to see the extent to which mortgage applications for purchases and portfolio extensions increase once these factors have played out.”