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Buy-to-let borrowing stable despite market slowdown

The buy-to-let market has remained relatively stable despite the decline in overall mortgage business during Q3 2019, according to Paragon Bank.

Its latest Financial Adviser Confidence Tracking (FACT) report found that the average number of mortgages introduced per office in Q3 2019 was 21.9 – down from 22.5 in the second quarter.

The average number of mortgages introduced per adviser also fell, down from 7.9 to 7.4.


However, the buy-to-let market remains solid since a notable decline in 2016, and comprised 17% of mortgages introduced in the quarter – up from 15% in Q2 2019.

Interestingly, remortgaging was the principle type of borrowing amongst home owners once again, accounting for almost half (46%) of mortgages introduced in Q3.

Meanwhile, next-time buyers accounted for 18% of new business, down from 19% in the previous quarter, and first-time buyers fell from 18% to 16%.

In terms of buy-to-let business completed in Q3 2019, first-time landlords grew from 11% to 13%, while remortgaging climbed from 52% to 55%. However, the proportion of landlords raising finance for portfolio extension was smaller, down from 23% of business in the second quarter to 20%.

Looking ahead, Paragon predicts intermediaries will see a 2% pick-up in overall business over the next 12 months and a 1% increase in buy-to-let.

John Heron, director of mortgages at Paragon, says: “After a number of years of instability and negative sentiment in the buy-to-let market, it’s encouraging to see mortgage intermediaries forecasting increased buy-to-let business over the next 12 months.”

“However, the market overall has been constrained by the current Brexit uncertainty and it remains difficult to see exactly when this will end.”

The FACT Index score – designed to establish advisers’ overall confidence in the mortgage market – is 97.8% for Q3 2019, down 11.2 compared with six months ago and the lowest score recorded since Q1 2017.


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