Paragon Bank has stated that landlords raising capital contributed to an increase in the level of buy-to-let remortgage business in the second quarter of 2020.
Mortgage intermediaries taking part in Paragon’s research indicated that remortgages accounted for 60% of buy-to-let cases in the second quarter, up from 48% in the previous quarter, as new lending for house purchase fell as a result of the lockdown.
The ability to secure a better interest rate was the most common reason for remortgaging; the motivator for 54% of landlords. However, 30% of landlords said that they remortgaged to raise capital. This made it the second most cited driver, accounting for double the amount of business than all the remaining reasons combined.
In addition, the survey highlighted the growing prominence of portfolio landlords in the PRS. Landlords who own four or more properties accounted for the highest proportion of buy-to-let mortgage business, rising from 25% in quarter one to 28% over the last three months.
Moray Hulme, Paragon director for mortgage sales, said: “These findings are encouraging for the sector because they show that landlords have not only been resilient during the recent challenges but have been planning for the future.
“The data also supports the idea that there is a shift towards a professionalisation of the private rented sector. This is positive because a higher number of professional landlords has been shown to correlate with higher standards in the sector.”