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The buy to let mortgage market is stable according to the latest FACT (Financial Adviser Confidence Tracking) report from Paragon.
The FACT report, based on interviews with 201 mortgage intermediaries, revealed a slowdown in overall mortgage business during Q3 2019, but stability in the buy to let market.
The average number of mortgages introduced per office in Q3 2019 was 21.9, down 3 per cent from 22.5 in the second quarter and the lowest figures since Q2 2017. The average number of mortgages introduced per adviser also fell, down from 7.9 to 7.4.
Despite this slowdown, the FACT report showed that the buy to let market has remained relatively stable since a notable decline in 2016 and comprised 17 per cent of mortgages introduced in the quarter, up 2 per cent from 15 per cent in Q2 2019.
Remortgaging was again the principal type of borrowing amongst homeowners, accounting for 46 per cent of mortgages introduced in Q3 and maintaining the disparity that has been widening at modest pace over the last five years. Elsewhere, next time buyers accounted for 18 per cent of new business, down from 19 per cent in the previous quarter, and first-time buyers fell from 18 per cent to 16 per cent.
In terms of buy to let business completed in Q3 2019, first-time landlords grew from 11 per cent to 13 per cent and remortgaging climbed from 52 per cent to 55 per cent. However, the proportion of landlords raising finance for portfolio extension was smaller, down from 23 per cent of business in the second quarter to 20 per cent.
Looking ahead, the FACT report showed intermediaries forecast a 2 per cent pick-up in overall business over the next 12 months and a 1 per cent increase in buy to let.
John Heron, Director of Mortgages at Paragon, said: ‘After a number of years of instability and negative sentiment in the buy to let market, it’s encouraging to see mortgage intermediaries forecasting increased buy to let business over the next 12 months. However, the market overall has been constrained by the current Brexit uncertainty and it remains difficult to see exactly when this will end.’
The FACT Index score, designed to establish advisers’ overall confidence in the mortgage market is 97.8 for Q3, down 11.2 compared with six months ago and the lowest score recorded since Q1 2017.