The proportion of landlords remortgaging their investment properties has fallen to its lowest level for over two years, according to Paragon Mortgages.

The buy-to-let lender’s Financial Adviser Confidence Tracker (FACT) Index, a panel-based survey of mortgage brokers, found that 39% of landlords obtained a buy-to-let mortgage via a financial adviser for remortgage purposes in the third quarter of 2009, the lowest level recorded since the first quarter of 2007.

In contrast, the proportion of landlords obtaining buy-to-let mortgages for portfolio expansion purposes has hit its highest level since the question was introduced to the FACT survey in 2001. It found that 48% of landlords obtained a mortgage to extend their portfolio in the third quarter of 2009. This represents a rapid recovery from the final quarter of 2008, when just 31% of landlords were taking out a buy-to-let mortgage for portfolio expansion purposes.

Only 10% of business via financial advisers surveyed was conducted by first-time landlords, the joint lowest level on record. The proportion of buy-to-let mortgages taken out by first-time landlords has decreased steadily over the decade, falling from 42% in the fourth quarter of 2001 to its current level.

John Heron , Paragon Mortgages’ managing director, said: “Landlords are not remortgaging for two reasons – they can’t because of the low number of mortgages available and there is little incentive to do so because the reversion rates when coming off an introductory deal are so attractive due to the low Bank of England Base Rate and Libor. Landlords are happy to stay with their existing lender and we think this will remain the case for the foreseeable future.