Hamptons has cited the credit crunch as a major factor influencing this 'about face' reaction to buying new property.
Research showed that the proportion of buy-to-let purchase mortgages decreased by nearly 26 per cent during the last four weeks. Buy-to-let remortgages increased by 6.2 per cent over the same period of time.
Signs that landlords are beginning to feel the squeeze from the present credit crunch and are choosing to sit tight before purchasing more properties are evident by the drop in the proportion of buy-to-let purchase mortgages from 43.84 per cent in October 2007 to 18.38 per cent November 2007.
Although buy-to-let still remains one of the most buoyant areas of the housing market, it appears that a certain number of landlords are recalculating their risk and expenditure instead of adding to their portfolio and purchasing more properties.
Hamptons Mortgages Tracker figures reveal that a number are choosing to recoup existing capital by re-mortgaging existing properties.
One reason why landlords are choosing to remortgage in this way might be to reduce the rent they charge with the intention of retaining long-term tenants.
In a climate where rates are uncertain, many landlords may have decided to take advantage of increasing loan-to-values available to them at remortgage in the hope to retain existing clients at the same rent, so to avoid any crippling void periods over the coming months.
“While buy-to-let remains a buoyant area to enter into, it appears that some buy-to-let landlords have had their confidence dented as a result of the recent credit crisis," said Jonathan Cornell, managing director of Hamptons Mortgages.
"Amateur landlords will have suffered the most and many may have held off from purchasing new properties - presumably in the hope that the market will begin to calm.
“Now that the Bank of England has cut the base rate by a quarter point, confidence will hopefully begin to be restored among landlords but it might take some time for this to take full effect. 2008 may not only signal the start of a New Year, but may also provide fresh hope for borrowers that interest rates will continue on their downward trend.”
