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Mortgage brokers have predicted growth in the buy let investment property market over 2020 according to the latest FACT research from buy to let lender Paragon.
The FACT research, which has tracked broker trends since 1995, found that one in five brokers expects to introduce more buy-to-let business in 2020, compared to 11 per cent who say it will fall. Overall, brokers expect to do 0.8 per cent more business this year, the second quarterly increase in a row.
FACT found that the proportion of landlords obtaining buy-to-let finance for portfolio extension rose to its highest level since Q1 2017 during the final quarter of 2019. Nearly one in four (24.5 per cent) buy-to-let mortgages were written for portfolio extension, whilst 50% was for remortgaging purposes, a fall from 55 per cent the previous quarter.
Of buy to let landlords remortgaging during the final quarter, the overwhelming majority (61 per cent) were doing so to secure a better rate of interest, with nearly a third (31 per cent) remortgaging to raise capital.
Overall, brokers said that buy to let accounted for 17.7 per cent of overall business during Q4 2019, the highest proportion for a year.
Richard Rowntree, Paragon Managing Director of Mortgages, said: ‘Buy to let lending has been driven by remortgage business in recent years, so it’s great to see the proportion of lending for portfolio extension purposes increase and hit its highest level for nearly three years.’
He continued: ‘It’s also encouraging to see that the balance of brokers expecting to write more buy to let business is positive for 2020 as confidence has been subdued for much of the past four years. These are green shoots and we hope that they will continue throughout this year on the back of a more certain regulatory, economic and political environment.’