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Remortgage trends and landlords’ rising reliance on the advice process
Over the past few years, we have seen a rising reliance on the intermediary market and the advice process across all areas of the mortgage market. This is especially apparent in an increasingly complex buy-to-let sector, especially from a funding and affordability standpoint.
According to recent Q3 2024 Landlord Trends report by Pegasus Insight for Foundation Home Loans, seven in ten landlords utilised a broker for their latest borrowing arrangement. Although 24% of landlords chose to go direct with a mortgage provider, only 7% did so with lender advice, while the remaining 17% opted for a direct path without any guidance. Among those who arranged their finance directly with lenders, just over half were remortgaging (51%), 36% were completing a product transfer, and just 9% were acquiring new properties.
Remortgaging activity among landlords is set to increase in the coming year. Currently, 37% of leveraged landlords plan to remortgage or complete a product transfer within the next 12 months. This trend signals a slight uptick from the previous quarter, driven by the changing landscape of BTL financing. On average, landlords expect to rearrange 2.4 BTL loans. Portfolio landlords are leading the charge, with half anticipating that they will refinance in the next year. Within this, just under 3 in 4 properties will be re-mortgaged in a personal name, which broadly aligns with the existing ownership status.
Amid market uncertainty, landlords are also shifting their preferences in product selection. While two-year fixed-rate products were previously popular, the data suggests that only 22% of landlords now favour them, marking a 10% decrease from Q1 2024. Instead, a growing share of landlords (33%) are leaning toward five-year fixed rates, an 8% increase, as they seek stability against fluctuating interest rates
These trends highlight landlords’ adaptive strategies within the evolving BTL market, with brokers playing an instrumental role in guiding them through refinancing, ownership, and product options.
FOR INTERMEDIARIES ONLY
