The proportion of all remortgages handled by intermediaries during the second quarter of 2014 reduced by 6% over the past year, from 36% in Q2 2013 to 30% currently, according to latest research from buy-to-let lender Paragon Mortgages.
While remortgages remain the most common form of mortgage borrowing, Paragon’s research shows a 4% drop in the number of remortgages processed over the past three months.
In comparison, there has been a 2% increase in the proportion of buy-to-let mortgages processed since Q1, accounting for 23% of all mortgages. In addition, intermediaries have reported a slight increase in the proportion of mortgages for first time buyers over the past year, from 17% in Q3 2013 to 19% currently.
According to Paragon’s panel of intermediaries, at buy-to-let level the proportion of remortgages fell by 4% over the past quarter from 30% to 26%. This more than reduces the changes seen in Q1 where the proportion of buy-to-let remortgages rose from 28% to 30%.
Meanwhile, the proportion of buy-to-let mortgages processed for first time landlords has slightly increased from 20% in Q1 to 22% currently. This reverses the change seen in Q1 where first-time landlord mortgages were down to 20% from 22% in Q4 2013.
John Heron (pictured), managing director of Paragon Mortgages, said: “The declining proportion of remortgages against the increased proportion of first time buyer mortgages represents a continuation of a trend that has been apparent over the past couple of years as the market has gathered momentum.
“It is promising to see an overall increase in the proportion of buy-to-let mortgages being processed, which again highlights the steady growth we are experiencing in the market.
“There is a clear declining trend in buy-to-let remortgages, with the proportion having dropped significantly since a pre-crisis peak in 2007/08 followed by a steady and continuing decline.
“It is also a positive step to see some growth in the number of first time landlords seeking buy-to-let as new blood in this market is important to a strong sustainable future for the private rented sector.”
