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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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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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 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

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