Mortgage intermediaries are expecting a boost in business over the next year as buy-to-let investment grows, research from Paragon Mortgages has found.
The eight-page quarterly survey, 18 Years of Buy to Let, showed that advisers expected to do 6 per cent more business between October and December compared with previous months.
This was attributed to the high demand in the private rented sector, which will keep the buy-to-let market buoyant.
Paul Clampin, director of underwriting at Paragon, said: “It is positive to see that average expected levels of mortgage business, both general and buy-to-let, have increased since the previous quarter, particularly following the recent implementation of the mortgage market review.
“Demand from tenants continues to remain high and is likely to do so over the foreseeable future as more people move into the private rented sector.
“Therefore, this is likely to have a positive effect on intermediaries’ expected levels of buy-to-let business.”
The FCA’s mortgage market review, which came into force in April 2014, included a number of reforms to ensure people could continue to get mortgages.
More than half of intermediaries surveyed by Paragon Mortgages in the third quarter expected their levels of buy-to-let mortgage business to remain stable over the next year, with 40 per cent expecting to do more business.
The majority – 69 per cent – attributed this to high rental demand.
The expected rise in business of 6 per cent was up slightly from the predicted quarter-on-quarter increase of 5 per cent in quarter two, the research said.
| Buy-to-let investor profile |
| 1996-2001: 49% increase in new buy-to-let investors. |
| 10% of buy-to-let investors make more than 50% of their income from rents. |
| The average UK buy-to-let investor is 56 years old and owns eight properties. |
| 8% of investors say being a landlord is their main occupation. |
| Source: Arla/Paragon Mortgages |
Adviser view
Annaley Lay, owner of Surrey-based A&L Mortgage Services, said: “It is difficult to say, but I would expect the market to remain buoyant.
“Things have definitely improved over the past couple of years. There are more buyers in the market, and slowly there is more property coming into the market.
“Whereas the mortgage lenders had extremely tight terms and conditions in the past few years, now the MMR rules are in place the chances of getting a mortgage are better than they were before.”
