Mortgage brokers in the UK have predicted growth in the buy-to-let mortgage business over the next in 2020 in view of landlords expanding their portfolios and strong remortgage levels.
Paragon’s FACT research, which has tracked broker trends since 1995, found that one in five brokers is expecting to introduce more buy-to-let business in 2020, compared to 11 per cent who say it will fall. Overall, brokers expect to do 0.8 per cent more business this year, the second quarterly increase in a row.
The research found out that the proportion of landlords obtaining buy-to-let finance for portfolio extension increased to its highest level since 2017 during the last three months of 2019. Nearly one in four (24.5 per cent) buy-to-let mortgages were sanctioned for portfolio extension, whilst 50 per cent was for remortgaging purposes.
The brokers said that buy-to-let accounted for 17.7 per cent of overall business between October and December of 2019, the highest proportion for a year.
The outcome of the UK general elections is positively impacting the residential property market, as investors expect stable long-term policies to favour them. An end is in sight for Brexit, which can reduce the uncertainty in the property market. The private rental sector is expected to grow consistently in 2019, especially in London, as demand picks pace.
Richard Rowntree, Paragon Managing Director of Mortgages, said: "Buy-to-let lending has been driven by remortgage business in recent years, so it’s great to see the proportion of lending for portfolio extension purposes increase and hit its highest level for nearly three years."