There’s been a big rise in the proportion of landlords remortgaging according to one of the sector’s most prominent lenders, Paragon.

In a survey of 201 mortgage intermediaries, it’s reported that 52 per cent of buy to let mortgage cases in the first quarter of 2018 were for buy to let investors seeking to remortgage, up sharply from 29 per cent in the same period back in 2015, prior to the first announcement of the gradual removal of tax relief on BTL mortgage interest.

Over the same time period, intermediaries say they have seen a drop in the proportion of mortgage applications from first time landlords, down from 19 per cent to 13 per cent of the total, as well as a fall in landlords remortgaging to raise funds in order to extend their portfolios. 

Remortgaging for portfolio expansion has fallen from 39 per cent to 22 per cent.

Compared with three years ago when equal numbers of landlords were remortgaging for a better rate and to raise captal, in Q1 2018, 60 per cent of landlords said securing a better interest rate was their primary objective. 

This compares with just 30 per cent of landlords who said raising capital was their top priority. As a result, the gap between landlords looking for a better rate and those raising capital is now at the widest seen since 2013.

“There’s a wide range of factors contributing to the surge in landlords remortgaging at the moment. These include the expiry of the initial term on mortgages taken out ahead of the stamp duty changes for second properties, the expectation of rate rises on the horizon and a desire to minimise interest costs in the face of new mortgage affordabilty rules” explains John Heron, managing director of mortgages at Paragon.