Mortgage Finance Gazette
Nearly a third of landlords are taking out buy-to-let remortgages so they can expand their portfolios and grow their cash reserves.
That is according to broker Mortgages for Business, which has observed this growing trend of ‘building a war chest’ through its recent research into the buy-to-let market.
Indeed, analysis by the firm of brokers shows, as well as the 30% creating a war chest, 46% of landlords were increasing the size of their loans to significantly higher than the long-term average of 38%.
It’s a shift from the situation back in June 2019. Last year, the broker said, the main concern of remortgaging landlords was to manage risk by, for example, moving onto a longer fixed-rate mortgage and away from variable rate products.
But now, according to the research, the management of risk was no third on the list of important concerns.
Steve Olejnik, managing director of Mortgages for Business, said: “Twelve months ago, in 2019, a lot of the landlords we worked with were looking to guard against risk.
“That’s shifting now as opportunities to purchase cheap properties present themselves. With property prices poised to drop before the end of the year, the balance between risk and reward is shifting. It will be interesting to see how landlords’ investment strategies adjust to changing tenant demand.”
Still, despite this, landlords remained somewhat risk-averse, according to the analysis, and they were increasingly looking to manage their cash flows.
Lowering monthly payments was now the second most important concern when remortgaging – it was the third in 2019.
Olejnik added: “Smart landlords know that the time is coming to bag some bargains and start expanding portfolios. Increasingly, that is where their remortgaging priorities lie.”
