Growth in buy-to-let remortgaging is being driven by landlords raising capital to fund portfolio expansion, according to research from Paragon Mortgages.

According to the Council of Mortgage Lenders, remortgaging accounted for over two thirds of the 21% increase in buy-to-let gross advances between the first and second quarters.

Paragon Mortgages’ intermediary survey showed capital raising was the number one reason for landlords remortgaging during the second quarter. On average, 47% of buy-to-let remortgages handled by intermediaries surveyed were for the purpose of raising capital, whilst 35% were to achieve a better rate of interest.

Other reasons for remortgaging included landlords’ existing lenders actively encouraging remortgaging (8%) and dissatisfaction with an existing lender (7%).

Remortgaging hit its highest level since the final quarter of 2008 during the second quarter, according to the CML’s figures. The £1.86 billion advanced for remortgage purposes represented 53% of the total £3.5 billion buy-to-let lending for the period.

John Heron , Paragon Mortgages’ managing director, said: “Approximately two thirds of properties in the private rented sector have no mortgage whilst the average loan-to-value on those properties with a mortgage is 48%