The number of first-time buy to let investors is rising, while experienced landlords are slowing down on remortgaging, according to new research.
The trends could indicate long-term property investors have reached the gearing ceiling on their portfolios.
The number of buy to let remortgages has consistently fallen away over recent months, says lender Paragon Mortgages, while the level of new buy to let mortgages taken out by first-time investors is steadily rising.
Remortgages dropped 6% in the past 12 months to 30% of the market at the end of June 2014.
However, new buy to let mortgages to first time investors has increased 2% in the first six months of 2014 to take 23% of all new borrowing.
John Heron, Managing director of Paragon Mortgages, said: “The declining proportion of remortgages against the increased proportion of first time buyer mortgages represents a continuation of a trend that has been apparent over the past couple of years as the market has gathered momentum.
“There is a clear declining trend in buy-to-let remortgages, with the proportion having dropped significantly since a pre-crisis peak in 2007/08 followed by a steady and continuing decline.”
Leeds tweaks fixed rates
Leeds Building Society has tweaked the rates of several two-year fixed rate buy to let mortgages.
The lender offers a choice of two-year fixed buy to let mortgages at different rates and loan-to-values (LTV):
- 2.99% up to 65%, with a £799 fee
- 2.79% up to 60%, with a £999 fee
- 3.09% up to 60%, with a £199 fee
The deals come with a free standard valuation worth up to £335 and free in-house legal services for remortgages.
Mansfield changes affordability formula
Mansfield Building Society has changed its buy to let affordability calculation so affordability is based on 130% of rental income at a notional interest rate of 5%.
The lender is applying the new formula to a new two-year 2.99% discount buy to let mortgage at 70% LTV. Remortgages come with a free valuation and legal fees paid.