Recent research indicates that a significant number of landlords are planning to remortgage in the coming year, highlighting a shift in the property market. With 39% of landlords intending to refinance, this trend suggests a proactive approach to managing mortgage costs amid changing economic conditions.
TL;DR: 39% of landlords plan to remortgage within the next 12 months; this trend is particularly strong among those with multiple properties, signalling a robust demand for buy-to-let lending.
Why Are Landlords Choosing to Remortgage?
Landlords are increasingly looking to remortgage as they seek to take advantage of potentially lower interest rates or better lending terms. The research from Pegasus Insight reveals that among landlords with four or more mortgages, a striking 56% plan to refinance. This contrasts sharply with just 24% of those holding one to three mortgages, indicating that larger portfolio landlords are more inclined to reassess their financing options.
What Does This Mean for Buy-to-Let Lending?
The anticipated remortgaging activity points to sustained demand for buy-to-let (BTL) lending and mortgage advice. Landlords planning to refinance expect to remortgage an average of 2.7 loans each, which underscores the importance of having tailored mortgage solutions available. This trend could lead to increased competition among lenders, potentially benefiting landlords by offering more favourable terms.
How Long Are Tenants Staying in Rentals?
Interestingly, the same research indicates that tenants are remaining in rented accommodation for an average of 8.2 years, with over five years spent in their current homes. This stability in the rental market may encourage landlords to invest further in their properties or refinance to improve cash flow, knowing that their tenants are likely to stay longer.
What This Means for Landlords
For landlords, the decision to remortgage can be a strategic move to manage costs effectively and enhance their investment portfolio. Given the high percentage of landlords looking to refinance, brokers should prepare to offer tailored advice and competitive BTL mortgage rates. Landlords should evaluate their current mortgage terms and consider how remortgaging might help them maximise their investment returns.
Frequently Asked Questions
What should landlords consider before remortgaging?
Landlords should assess their current mortgage terms, interest rates, and overall financial goals. Consulting with a mortgage advisor can help identify the best remortgaging options.
How can landlords benefit from refinancing?
Refinancing can provide landlords with lower interest rates, reduced monthly payments, or access to equity, enabling them to invest further in their properties or improve cash flow.