The number of landlords who decided to remortgage their buy-to-let loans using the services of a financial adviser declined by 9 percent during the final months of 2009, in comparison to figures released for the third fiscal quarter. Paragon Mortgages found that only 30 percent of landlords turned to a financial advisor in order to remortgage their buy-to-let loan, while this figure stood at 39 percent three months earlier. John Heron, Paragon’s managing director, predicted that the number of landlords who decide to remortgage will likely continue to decline, until signs of life return to buy-to-let lending and new, competitive loan products begin to appear. One of the key reasons why so few landlords are considering the option of remortgaging their loan is because the reversion rate is often more beneficial than the relatively few remortgaging options currently available.
While the number of buy-to-let products remains far lower than before the start of the financial crisis in autumn 2008, Paragon reported that more landlords seeking to expand their portfolio of properties are now able to secure loans. The Financial Times published statistics which suggest that 52 percent of landlords who sought to extend their portfolio were successful in receiving a buy-to-let loan. This figure represents a modest increase from the 48 percent rate, which characterized the third quarter of 2009. Additional statistics also suggest that the number of first-time landlords seeking the assistance of financial advisors in obtaining loans increased during the final months of 2009. But the continued lack of buy-to-let products remains a concern for landlords. Observers agree that the rental sector’s future growth prospects rest in large part on the availability of new loans.
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