Mortgage advisers confident buy-to-let business will grow over next year

13 July 2020 | Investment

Mortgage advisers confident buy-to-let business will grow over next year

Some four in 10 mortgage advisers expect to write more buy-to-let business in the next 12 months, according to Paragon Bank.

The survey of more than 200 intermediaries found that 41% expect more buy-to-let business, a slight dip on the 43% recorded in Q1 2020.

However, it marks an increase on the 38% recorded in the final quarter of 2019.

Last week, Rishi Sunak announced a stamp duty holiday on the first £500,000 of all property purchases in England and Northern Ireland until March 31 2021.

The additional 3% stamp duty surcharge on additional properties will still apply, but investors will benefit from not having to pay the standard stamp duty on purchases of up to £500,000.

According to Hamptons International, the stamp duty holiday will save the average investor almost £2,000. It’s therefore expected that the stamp duty cuts could encourage buy-to-let investors to make purchases before next spring.

Speaking ahead of the stamp duty cut, Richard Rowntree, managing director of mortgages at Paragon Bank said that demand for buy-to-let via intermediaries remains ‘strong and stable’.

“We have seen a solid rebound in buy-to-let business since the housing market reopened in mid-May and landlords have been unlocking capital to invest and grow their portfolios further,” he said.

He added that he expects demand for rental property to underpin this as consumers delay property purchases or find it difficult to obtain a mortgage following the temporary removal of higher loan-to-value products from the market.

“Coronavirus has had a clear and damaging impact on the economy and the UK as a whole, but the long-term fundamentals underpinning demand for buy-to-let remain unchanged,” said Rowntree.

“The UK has a growing population with increasing numbers of households and the private rented sector will provide a good quality home for many of them.”

<!–

–>

This post has originally been featured in Property Investor Today.