More landlords are remortgaging compared to 12 months ago, with a number being forced by their existing lenders to find alternative funding from elsewhere, although some are also remortgaging voluntarily in order to expand their portfolios.
According to research from specialist buy-to-let broker Mortgages for Business, an increasing number of landlords are remortgaging more complex buy-to-let property.
‘Complex’ properties means Houses in Multiple Occupation (HMO’s) and Multi-Unit Freehold Blocks (MUFB’s), where there might be a mixture of retail units, offices and flats.
In the last 12 months, the proportion of landlords refinancing HMOs has jumped to 55%, while remortgaging on MUFBs has increased from 76% to 78% year on year.
In particular, property investors have been remortgaging lower-value HMO property.
David Whittaker, managing director of Mortgages for Business, said: “Gross yields on buy-to-let property are particularly attractive at the moment thanks to the mess which the first-time buyer market finds itself in. Property prices are flat and tenant demand is stratospherically high, which is why more landlords are refinancing and manoeuvring themselves into a position to add to their portfolios. While high demand and subdued property prices are the carrot, certain lenders are the stick, particularly RBS and Irish lenders which are demanding that landlords refinance elsewhere as they try to reduce their exposure to property.”
The number of buy-to-let lenders has recently risen from 25 to 26, with the arrival of InterBay Commercial. However, the number of mortgage products available has dipped.
Mr Whittaker said he expected the volume of lenders to recover and improve this year, because of the UK Government’s Funding for Lending scheme.
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