According to new statistics, the rate of take up in buy to let mortgages has slowed in 2019.
For the month of June 2019, some buy to let investors chose a wait and see approach, thanks to political and economic uncertainty in the UK. The statistics show that there was approximately 5,300 new mortgages for buy to let home purchases completed. This was a decrease of 3.6 per cent from the same time period in 2018. In comparison, remortgaging for buy to let properties fell by 0.8 per cent.
This trend is partly due to a marginal drop in the number of fixed-rate mortgages which are coming to an end, in addition to the increasing popularity of the transfer of products. This is according to the most recent data from UK Finance, the trade association for the financial services and banking sector.
Richard Pike, marketing and sales director with Phoebus Software, the solutions provider for the lending, banking and building society sectors, explained that considering that the UK has been in a state of flux for more than three years, it is unsurprising that the statistics have dropped year on year across the different mortgage market sectors.
However, when acknowledging that the mortgage numbers for the month of June more than likely related to mortgage applications made around the time that the UK should originally have been leaving the European Union, it is somewhat shocking that the figures were not even lower. Mr Pike explains that although the figures for buy to let mortgages are a concern, with the next deadline for Brexit looming, there could be a ray of light at the end of the tunnel. Nevertheless, a resolution to the crisis will be unearthed, and despite the best efforts of the UK government to curb investment in the buy to let market, a resolution to the problems in the market will ensure that any investor who may have been holding off making a purchase will know whether investing in property or not is a viable option for them once again.
Technology innovations such as property inventory software also make investing in buy to let property easier than ever before. Although the UK may be a nation of homeowners, purchasing property is becoming increasingly expensive and out of the reach of many, so the demand for rental accommodation continues to remain as strong as ever.
David Copland, director of mortgage services at The Mortgage Alliance, estimates that the final six months of the year could be more active for mortgage lenders. This is because a number of mortgage deals are predicted to come to the completion of their terms. The Mortgage Alliance is a mortgage lender which also assists businesses. Mr Copland further stated that an estimated £90.2 billion worth of mortgages for residential homes, and around £8.3 billion worth of buy to let mortgage deals, will have come to the final date of their terms between the months of June and October in 2019. He explains that this represents a great opportunity for mortgage advisers to meet with their customers and discuss the possibility of remortgaging, in order to help them discover and lock in the very best deals with are available to them.
According to the latest data, there were 32,260 mortgages completed for new first time homebuyers in the month of October 2019. This was an increase of 2.8 per cent on 2018 figures for the same month. For home movers, there were 33,370 mortgage applications completed in October 2019, which was an increase of 4.2 per cent from the same month in 2018.