Buy To Let remortgages edges up as investors react to tax change

There has been a three per cent increase in remortgaging levels amongst buy to let investors in March according to data from Connells Surveys & Valuation - although the number of valuations for the sector has dropped far below its spring average.

“While buy to let valuations are at half the typical average for March, those who have decided to stick it out in the sector are trying to recoup the loss of mortgage tax relief” says John Bagshaw, corporate services director.

“With market rents not yet rising, one of the few alternatives has been to remortgage. More landlords have taken this path in March, given the lower cost of borrowing and higher property values.”

Meanwhile, data from Mortgages for Business suggests that percentage-based arrangement fees have become the new standard among buy to let mortgage products.

Flat fees have long been popular as a way for lenders to maintain profitability while still offering competitive rates, while other products instead carry a variable fee based on the loan amount.

Mortgages for Business figures from the first quarter of 2017 show that 44 per cent of all buy to let mortgage products now carry a percentage-based fee, overtaking flat fees (41 per cent) for the first time in four years.

There was also an increase in the average flat fee, up to £1,446 from £1,397 in Q4, and together these changes have increased the average effect of mortgage charges to 0.64 per cent.