The Property Ombudsman

Remortgaging accountable for 66% of buy-to-let lending

New Figures in 2015

Remortgaging is now accountable for 66% of all buy to let lending, according to new research.

Of the loans taken out during the first quarter of 2015, two thirds were said to be remortgage cases; an increase from the 62% during previous quarter. The remaining 34% of lending was said to be for new property purchases. The same research also demonstrated that the average loan to value ratio had risen by 3% when compared with Q4 of 2014.

It’s not just remortgage rates that have increased either. The average gross yield for buy to let property also increased slightly from 6.3% last quarter to 6.4%, although there are higher yields to be found in locations such as the North West.  

With buy to let loans currently accounting for 25% of the overall mortgage market and lending tipped to reach the £30 billion mark by the end of 2015, the appetite for investment property continues to rise.  

Sequre’s own internal research showed that 1 in 5 buy to let investors refinance their own homes in order to fund a buy to let purchase, and with rental demand set to increase significantly this year, there are more buyers choosing to invest in buy to let as a means of generating a healthy income.

comments from sequre

Graham Davidson, Managing Director of Sequre Property Investment, comments on the new remortgage research:

“With property now known to be outperforming all other types of investment, we’re finding that the interest in buy to let property has certainly intensified. Although the report shows an average gross yield as 6.4%, we know that certain areas of the UK, such as Manchester and Liverpool, average between 7-8%, sometimes even higher. With these kind of yields, as well as capital growth, the spike in buy to let lending comes as no great surprise.”

“Remortgaging is a common way to release cash from the equity within a property. Many homeowners wanting to purchase buy to let have refinanced their home to enable them to do this – in fact, 1 in 5 of our clients utilised this benefit. Experienced investors also use remortgaging as a way of releasing cash and adding more properties to their growing empire. Either way, remortgaging definitely plays a large part in the success of a buy to let portfolio.”

If you're looking at a buy to let mortgage, or are considering refinancing to purchase a buy to let, we can recommend professional mortgage brokers who can source the best deal on the market to meet your financial needs. We work with experts in the mortgage industry who understand the complexities when it comes to borrowing and can guide you through the mortgage process with ease. To find out more, contact our team today on 0800 011 2277.

For more information on investing in buy to let property, call our team today on 0800 011 2277

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