Paragon Mortgages’ latest landlord research has found that landlords prefer to source buy-to-let finance via intermediaries.
The buy-to-let lender’s Private Rented Sector Trends survey, which has been tracking landlord confidence and views on the buy-to-let market for 20 years, reported that 36% of landlords in Q4 preferred to source buy-to-let finance exclusively via intermediaries. This is a 6% increase over the past three months, up from 30% of landlords in Q3.
In comparison, 23% of landlords in the last quarter of 2014 preferred to source buy-to-let finance directly from lenders, and 23% sourced through a mix of intermediaries and lenders, which reduced from 28% in Q3.
Large-scale landlords – those with five or more properties, were more likely to prefer to source all their buy-to-let finance via intermediaries – 40% compared with 23% of small-scale landlords (those with up to five properties). Small-scale landlords on the other hand were almost twice as likely to source buy-to-let finance directly through a lender – 35% compared with 19% of large-scale landlords.
Some 60% of landlords agreed that intermediaries provide a valuable service in finding the best buy-to-let deals, in comparison with only 6% who disagreed. Additionally, 42% of landlords surveyed said that sourcing directly though a lender is only suitable for the more simple buy-to-let propositions.
John Heron (pictured), managing director of Paragon Mortgages, said: “Although the market has seen strong growth this year, many landlords remain cautious, particularly in view of interest rate expectations, the weaker conditions that we have seen in the housing market and the disruption we are likely to see around the general election in 2015.
“When combined with the positive benefits that professional mortgage advice can bring, it is no surprise to see landlords turning more to the intermediary sector in less certain times.
“Landlords, especially those newer to the market, recognise the benefits of using a trusted, experienced and knowledgeable broker to help source their finance. Brokers have always been key to the buy-to-let mortgage market and will continue to be, going by this research, for as far ahead as we can see.”
