The number of five-year fixed rate BTL mortgages increased before the introduction of the buy-to-let Stamp Duty surcharge in April 2016
A Paragon survey has found that brokers operating in the buy-to-let market will switch their attention to the remortgage of five-year deals written in 2016 after the Stamp Duty holiday ends at the end of March.
50% of brokers that deal in buy-to-let said that they will focus on five-year remortgage business when the Stamp Duty holiday ends.
The number of five-year fixed rate buy-to-let mortgages increased significantly in the run-up to the introduction of the buy-to-let Stamp Duty surcharge in April 2016. Industry data shows that the number of five-year fixed buy-to-let completed in the six months to the end of March 2016 was 121% higher than the same period in 2015.
Paragon said that the introduction of new buy-to-let underwriting rules in 2017 provided further stimulus to the five-year fixed market, with this length of deal continuing to grow in popularity since.
Moray Hulme, Paragon director for mortgage sales, said: There was a significant increase in five-year fixed rate business written in the run-up to the introduction of a 3% buy-to-let Stamp Duty surcharge in April 2016 and those deals are due to expire in the coming months.
Brokers are extremely busy getting deals over the line ahead of the end of the Stamp Duty holiday, but the prospect of remortgage business will give them some hope that they won’t face a complete cliff edge of business as we head into April, Hulme said.
Other areas of focus identified by brokers included concentrating on clients’ needs for short-term finance and diversifying into holiday lets, selected by 16% and 13% of brokers respectively. Meanwhile, four in 10 brokers said they had no plans to cope with a decline in business once the Stamp Duty holiday ends.