Paragon (a buy-to-let mortgage provider) has found an increase in landlords applying to remortgage in the first quarter of this year. Experts surmise this is due to landlords wanting to lock in low rates in anticipation of interest rate rises. Alongside this there have been fewer applications from individuals looking to buy their first buy-to-let property. There has also been a fall in landlords remortgaging to raise capital in order to extend their portfolios. This is compared to the first quarter of 2015 and subsequent to the announcement of the far-reaching tax changes for residential landlords. More details about these re-mortgaging trends can be found here.
Another buy-to-let mortgage provider (Aldermore) has found that it is smaller landlords with fewer than four properties who are less likely to expand their portfolios (one in six are considering expansion). Overall, four out of 10 portfolio landlords are planning to extend their buy-to-let holdings. Only a small number, 8% (less than one in 10) are planning to reduce the number of properties they own. There is a general fall in new buy-to-let lending over the past year, alongside an increase in re-mortgaging. Aldermore’s findings can be read in more detail here.
Another trend seen in a study by OneSavings Bank is landlords looking to diversify their portfolio and considering commercial property, semi-commercial or mixed use and HMOs.
Meanwhile as we know rents have been increasing rapidly but wages more slowly. London rents have sky-rocketed by 25.9 percent in six years while wages have increased a mere 9.1 percent in this time period. This same trend is seen to a lesser but still significant degree in other parts of the UK, with rental costs increasing by 18.2 percent compared to a 9.8 percent increase in wages during this time. Information has been taken from the Office of National Statistics and the Valuation Office and compiled for the GMB (trade union) Congress. The trend in rent rises outstripping wage increases was reported here.