New figures published in recent days reveal that the number of landlords looking to re-mortgage hit a new high in the third quarter (Q3) of 2018.
According to Paragon’s latest Financial Adviser Confidence Tracking Index (FACT), 57 per cent of known landlords rushed to re-mortgage their buy-to-let properties in Q3, up from just 49 per cent recorded during the previous quarter (Q2).
However, the number of first-time or ‘accidental’ landlords seeking out new mortgages fell from 14 per cent to just 10 per cent during the same period, the tracker reveals.
Overall, buy-to-let mortgages accounted for 19 per cent of all of Paragon’s Q3 lending.
John Heron, Managing Director of Mortgages at Paragon, said that a string of recent tax and regulatory changes affecting the market were deterring newcomers from investing in buy-to-let property.
However, he said that against a backdrop of higher taxes, it was “no surprise” that many landlords were “taking the opportunity to reduce their mortgage finance costs” by re-mortgaging onto better deals.
“Tax bills due in January 2019 will include the first phase impact from the withdrawal of mortgage interest tax relief and landlords are preparing carefully for the next stages ahead,” he said.
“This [increase in re-mortgaging activity] is clearly a response to the increase in costs that landlords face following changes to Stamp Duty and tax relief on finance costs.”