Buy To Let Mortgages Continue To Lead The Way In UK Property Market

Re-mortgaging activity in the first quarter of 2013 saw UK mortgage lending reach a new high, with more landlords trying to raise finance to buy more suitable residential properties with a view to letting them out to tenants, according to the latest research by Mortgages for Business.

Re-mortgaging activity also increased sharply from 43% in the last quarter of 2012 to 69% of all residential buy to let transactions in the first quarter of 2013, the highest recorded figure for a single quarter since the beginning of 2011.

Refinancing also accounted for over two-thirds of all buy to let mortgage transactions on Houses of Multiple Occupation (HMO) and Multi-Unit Freehold Blocks (MUFB).

Managing Director of Mortgages for Business, David Whittaker said: “Gross yields are tantalisingly strong at the moment, and that has sparked a real splurge of refinancing as landlords try to unlock enough capital to expand their portfolios and make hay while yields are high. With so much refinancing going on at the moment, we might well see a purple patch of purchasing activity later on in 2013.”

Aside from remortgaging, many investors are also turning to alternative lending in order to acquire more rental properties, according to a poll of financial intermediaries.

In a recent survey of 350 mortgage brokers carried out by bridging lender West One Loans, a record 36% of intermediaries listed buy-to-let as the most popular use for bridging loans.

This figure has increased dramatically from just 23% since the bridging lender first carried out a sentiment survey in August 2012.

A spokesman for Finance 4 Landlords said, “A generation of tenants are demanding rental accommodation, and a growing number of landlords need buy to let mortgages and even bridging loans in order to complete transactions on investment properties. The latest UK PRS rental figures show that there is a real hunger for more investment properties. However, banks remain hesitant on lending leaving property investors without support. The supposed upturn in traditional mortgage lending isn’t meeting the property investor’s needs. Unless banks and mainstream mortgage lenders are willing to trust the yield figures calculated by investors and put their money where their mouth is, the situation won’t change. We believe that there is another way, which is why we are here for buy to let landlords and property investors who want to increase their rental property portfolios”

Article courtesy of Legal 4 Landlords

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