High Demand for Buy-to-Let Mortgages


According to a recent report from Paragon, buy-to-let business among mortgage brokers is currently at a seven-year high. In a survey of almost 200 intermediaries, over half confirmed that they were expecting higher levels of buy-to-let business in 2021 compared to last year, with 21% of those surveyed expecting an increase of 10% or more.

Indicating an upturn in optimism compared to 2020 when we saw the UK experience unprecedented circumstances as a result of the pandemic, 2021 looks to be a fruitful year for both landlords and mortgage brokers in terms of buy-to-let mortgage activity.

Demand for buy-to-let mortgages is currently high, with just under half of brokers stating that the current demand is strong or very strong. Only 12% of those surveyed stated that demand was weak – this is the lowest number since before the start of the pandemic.

Brokers have an excellent grasp of current demand and seem to be able to predict how things will go over the coming months. This high level of optimism could be, in part, due to the stamp duty/LBTT holiday that was introduced in June but with the tax break ending recently in Scotland, high demand in the buy-to-let mortage market is underpinned by the longer-term demand for rental homes.

Latest House Price Index

The latest data released by Halifax has revealed that on a monthly basis, house prices in March were 1.1% higher than the previous month and over Q1 of 2021, they 0.3% higher than in Q4 of 2020. Year-on-year, house prices were 6.5% higher than in March 2020.

There was a fairly subdued start to the year but in March the housing market saw a resurgence with prices 1% higher compared to the previous month. Back in March 2020, no one could have predicted how well the property market would fare given the backdrop of the pandemic. It is expected that the high levels of activity will be maintained over the coming months with consumer confidence given a boost by a successful vaccine programme and buyer demand for larger properties with outside space.