While intermediaries are still anticipating that the greatest proportion of their buy-to-let business (43%) would consist of loans to landlords adding to their existing portfolios over the next three months, they raised their predictions for the proportion of remortgage business from 38% in December to 40% in March.
This could be due to the fact that a large number of attractive deals are coming to the end of their discounted term, and in the absence of extended redemption charge structures, moving to another attractive deal with another lender is quite compelling.
Changing perceptions of interest rates may also play a part in the shift towards remortgaging. In December, only 12.5% expected interest rates to rise over the following three months. That proportion has risen to 22.4% which may account for an expectation that some landlords will be switching products in order to fix or even reduce their costs. Currently 57% expect rates to remain the same, down from 69% in December.
Buy-to-let intermediaries are still upbeat about the market as a whole and there has been a dramatic drop in the proportion who expect house prices to fall, down from 28% in December to just 10% in March. By contrast, 31% now expect prices to rise modestly, up from 17% in December. Rental levels are also underpinning the market. The proportion of brokers expecting rents to fall has halved from 16% in December to just 8% in March. The majority (51%) expect rents to be stable and 41% expect rents to increase over the next three months.
Finally, the Chancellor’s changes to stamp duty in the budget have been taken positively by intermediaries. More than twice as many intermediaries believe the increase in the stamp duty threshold will benefit the buy-to-let market as those who believe it will damage it.
Nicola Severn, Marketing Manager at Mortgage Trust commented: "Intermediaries are clearly still optimistic about the buy-to-let market. The expectation of an increase in remortgage levels reflects the professional attitude among investors who not only want to protect themselves against any potential increase in interest rates, but who are also keen to take advantage of the attractive offers currently available in the market place. Intermediaries are sanguine about the outlook for the housing market and for rental levels, and changes in stamp duty are also contributing to their generally positive view."
