Buy-to let remortgage transactions outweighed purchases by more than two to one in 2015, according to data released by Mortgages for Business.
However, this is likely to change during 2016, if the results for quarter four are any sort of a guide.
In the final quarter of 2014, remortgages for vanilla buy-to-let property accounted for 64% of transactions. HMO’s and Multi-Unit Freehold Blocks saw larger remortgage activity, at 78% and 88% respectively.
Unsurprising
David Whittaker, managing director of Mortgages for Business, noted, ‘the results aren’t surprising; for some time now landlords have been making considerable savings through remortgaging. Many have also been releasing equity to make improvements and plans further purchases, However, I anticipate that we will see a reversal of this trend in the first quarter of this year as landlords hurry to expand their portfolios before the stamp duty surcharge kicks in on 1st April.’[1]
‘The number of enquiries for purchase finance is already well ahead of where we were this time last year, particularly from those looking to sell their personally owned property into a corporate vehicle,’ he added.[1]
What trends will BTL market follow in 2016?
Pace
Yields for all property types increased in Q4 of 2015 but in real terms, continued to fall as rental income struggled to keep up with rising property prices. Returns for the more complex properties however remained well above the 6% mark.
The total number of lenders in the market remained at 33, with the number of buy-to-let mortgage products rising to an average of 975.
Whittaker observed that, ‘it is unlikely that this average figure will be topped going forward unless new lenders enter the market, or some of the existing providers start to offer products to limited companies. Of course, that figure is only an average-at one point at the beginning of December our tracking system, Mortgage Flow, showed £1,168 products..’[1]
[1] http://www.propertyreporter.co.uk/finance/will-btl-purchases-transcend-remortgages-this-year.html