BTL market settles after remortgage rush

BTL market settles after remortgage rush

According to a new report from Mortgages for Business, although remortgaging continued to make up the majority of activity in the buy to let market, purchase lending returned to levels seen before Q3.

Standard BTL transactions (or vanilla as they are known) grew from 28% in Q3 to 38% in Q4. Meanwhile, there was a more subtle shift in the Houses in Multiple Occupation (HMO) lending market, with the share of purchases rising to 26%. While this is below the level seen in Q2 2016, it brings this part of the market back in line with the level seen before the announcement of the changes to landlords’ tax relief in 2015.

David Whittaker, CEO of Mortgages for Business said: “It is encouraging to see that the share of lending for purchase in the buy to let mortgage market returned to normal in Q4 2016.

Following a notable shift towards lending for remortgage in the third quarter, landlords showed they were once again willing to commit to new purchases. The outcome of the EU Referendum, and the subsequent macro-economic uncertainty dampened purchase lending in Q3, with many landlords initially opting for a cautious approach.


While changes to Stamp Duty on second properties and landlords’ tax relief mean that landlords need to approach their investments intelligently, there are still excellent returns to be had in the market – especially compared to other asset classes.”

The results of the Index also show that the average loan to value (LTV) ratios across all products remained stable at 67% in the final quarter of 2016. Gross yields also remain unchanged.  

The Index also reveals that there was a significant uplift in the typical property value and loan size in the multi-unit block mortgage market. This is due to an increase in the number of mortgages being taken out on very high value multi-unit properties. Over Q4, 30% of multi-unit applications involved properties worth more than £1,000,000.

Mr. Whittaker continued: “There is clearly an appetite among investors for more valuable multi-unit blocks, with the lending share of million-pound plus blocks from growing under a fifth in Q3 to almost a third in Q4.”

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

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brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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