Paragon Mortgages has revealed the proportion of landlords remortgaging their investment properties continued to decline in the fourth quarter of 2009.
The buy-to-let lender’s Financial Adviser Confidence Tracker (FACT) Index, a panel-based survey of mortgage brokers, found that 30% of landlords obtained a buy-to-let mortgage via a financial adviser for remortgage purposes in the final quarter of 2009, down from 39% in the third quarter. This is the fourth quarterly decrease and the lowest proportion since the third quarter of 2006.
Paragon acknowledges that in the current economic environment there is little incentive for landlords to remortgage, as the low Bank of England base rate means it is normally financially beneficial for landlords to remain on their mortgage reversionary rates. In addition, there continues to be a lack of mortgage products to enable landlords to remortgage.
According to the CML, the number of buy-to-let gross advances fell by 72% from 83,400 in the final quarter of 2007 to 23,700 in the third quarter of 2009, with the value of those gross advances falling from £11.3 billion to £2.1 billion, an 81% decrease. The number of gross advances for house purchase has halved over the period, from 32,650 to 14,460, whilst remortgage business has been harder hit, with the number of gross advances falling 78% from 37,920 to 8,420.
John Heron , Paragon Mortgages’ managing director, said: “Buy-to-let remortgaging activity continues to decline and we can see it only going one way until competition starts to increase. At the moment
