Buy-to-let now one-fifth of brokers' business

Residential mortgages accounted for 71% of brokers’ business in the last three months of last year, falling from 76% in the previous quarter.

However, buy-to-let rose from 17% of brokers’ business to 21% in the three months to the end of December 2010.

Of the buy-to-let business handled during the period, specialist lender Paragon says  45% was for experienced landlords expanding their portfolios and 34% was for remortgaging purposes.

First-time landlords accounted for 18% of buy-to-let activity – the highest proportion since the first quarter of 2010 – with property substitution accounting for 3% of business.

John Heron, Paragon Mortgages’ managing director, said: “Buy-to-let is clearly an important source of business for the broker community and, given the growth in tenant demand and expected expansion of the private rented sector, it can play an even greater role going forward.

“It is forecast that nearly one in five households will live in privately rented accommodation by 2015, up from the current one in seven, and the sector will obviously require buy-to-let finance to facilitate that growth.

“The broker community is well placed to help landlords meet their finance needs. Buy-to-let is a commercial product and landlords appreciate the advice and support offered by the intermediary sector.

“The good news is that competition and innovation is slowly but surely returning to the buy-to-let market, and that is likely to continue throughout 2011.”