Buy-to-let borrowing remains stable despite a slowdown in the overall mortgage market, according to data released by Paragon.
According to the company’s latest Financial Adviser Confidence Tracking (FACT) Index, based on interviews with 201 mortgage intermediaries, there was a slowdown in overall mortgage business in the last quarter, despite stability in the buy-to-let market.
The average number of mortgages introduced per office in Q3 2019 was 21.9, down three per cent from 22.5 in the second quarter and the lowest figure since Q2 2017.
The average number of mortgages introduced per adviser also fell, down from 7.9 to 7.4.
Despite this slowdown, the buy-to-let market has remained relatively stable since a notable decline in 2016 and comprised 17 per cent of mortgages introduced in the quarter, up two per cent from 15 per cent in Q2 2019.
Remortgaging was again the principal type of borrowing amongst homeowners, accounting for 46 per cent of mortgages introduced in Q3 and maintaining the disparity that has been widening at modest pace over the last five years.
Elsewhere, next time buyers accounted for 18 per cent of new business, down from 19 per cent in the previous quarter, and first-time buyers fell from 18 per cent to 16 per cent.
In terms of buy-to-let business completed in Q3 2019, first-time landlords grew from 11 per cent to 13 per cent and remortgaging climbed from 52 per cent to 55 per cent.
However, the proportion of landlords raising finance for portfolio extension was smaller, down from 23 per cent of business in the second quarter to 20 per cent
Looking ahead, intermediaries forecast a two per cent pick-up in overall business over the next 12 months and a one per cent increase in buy-to-let.
John Heron, director of mortgages at Paragon, says: “After a number of years of instability and negative sentiment in the buy-to-let market, it’s encouraging to see mortgage intermediaries forecasting increased buy-to-let business over the next 12 months.
“However, the market overall has been constrained by the current Brexit uncertainty and it remains difficult to see exactly when this will end.”
