Buy-to-let mortgage borrowing increases

Buy-to-let mortgage borrowing increased by one per cent in the third quarter of 2017, reversing a major downward trend that had been taking place over the previous year.

This was according to Paragon Mortgages, which has found mortgage intermediaries have been busier across the whole sector, including among rental landlords.

Overall, the number of mortgages introduced per office was 24, representing a nine per cent rise on the second quarter, as well as being eight per cent higher year-on-year. It was the third highest figure recorded since the financial crisis.

While that was made up primarily of increased activity among remortgagers and home movers, there was also a one per cent increase among first-time buyers.

The growth of mortgage lending may reflect the improved conditions in the housing market as housing supply improves through increased construction rates and government schemes like help to buy have an impact.

For buy-to-let to recover, however, suggests a significant rebound in confidence among landlords after the negative impact of changes to tax and regulations in recent years, which were aimed at curbing activity.

Indeed, while over half of advisors surveyed still saw buy-to-let mortgage demand as weak or very weak, the number reporting it to be strong or very strong increased from six per cent to nine per cent. This, while there is a notable improvement, the buy-to-let market still has a long way to go to recapture its former strength.

The news comes despite a reported record increase in buy-to-let mortgage rates last month.

According to Moneyfacts, the typical tracker rate had jumped from an all-time low of 2.23 per cent to 2.43 in the last month, with the change taking place in the wake of the base rate increase from 0.25 per cent to 0.5 per cent, the first rise since the summer of 2007.