Buy-to-let business down in September
In September new buy-to-let home purchase mortgages are down by 18.8% and new buy-to-let remortgages down by 0.8%, UK Finance data has found.
The mortgage market has started to soften with every sector of the industry slowing in September.
Jackie Bennett, director of mortgages at UK Finance, said: “Overall remortgaging for both residential and buy-to-let properties have levelled out after a period of strong growth. This reflects the number of fixed rate loans reaching maturity.
“Buy-to-let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of recent tax, regulatory and legislative changes.”
Dilpreet Bhagrath, mortgage expert at Trussle, attributed the slowdown to Brexit uncertainty.
Bhagrath said: “The market is looking subdued at the moment as a lot of financial pressure is putting new buyers off and many people are reluctant to buy and sell properties until the Brexit deadline has passed.
“What is positive is that remortgaging numbers are only fractionally down from last year, despite fewer people moving home this year. Switching to a different fixed rate mortgage product can save households thousands of pounds a year.
“With 2 million people currently on a Standard Variable Rate (SVR) mortgage, we hope that with the increased use of technology making the switching process easier, we’ll see more remortgages and fewer people languishing on an SVR.”
Kevin Roberts, director, Legal & General Mortgage Club, agreed: “A softening in activity is understandable when we consider the wider slowdown the housing market is experiencing. As Brexit draws nearer, many homeowners are deciding to sit tight before they plan their next move.”
He also added that the BoE’s changes to interest rates could help matters.
He said: “The Bank of England’s interest rate hike should act as a nudge for those coming to the end of their mortgage term. The current low rate era won’t be around forever. So, whilst the rates are still low, getting in touch with a mortgage broker can help you plan ahead. Brokers can access thousands more products than going direct to a lender, giving borrowers a better chance of finding a product that is suited to their needs.”