The following article is a good indicator of the changing market place for Landlords and their lack of confidence in the buy to let market.
With the tax and regulation changes over the last couple of years, the negative impact on the yields for Landlords, has deterred them from expanding their portfolios and instead seek ways to protect their investments and, where possible, improve margins and the best way currently is to re-mortgage on lower rates.
But this seems to be a route that will be made more difficult in the not too distant future…
For the full article: Click here to view original web page at www.propertywire.com
This is expected to impact on remortgage activity in the sector going forward as they take action to combat higher costs, according to the latest private rented sector trends report from Paragon.
The report points out that the latest figures from UK Finance highlight the extent of the switch in focus from house purchase to remortgage, with buy to let house purchase transactions in 2018 down by 34% to 66,400 compared with 2014 and remortgage transactions up 76% to 169,100 over the same timeframe.
The survey, which tracks the experience of more than 200 landlords with an average of 12.8 properties and over 20 years, also shows that average portfolio gearing, which measures the proportion of debt finance relative to a portfolio’s overall value, has fallen from 40% in 2014 to 33% today, with landlords who have three or more properties borrowing 36% of their portfolio value on average.
For example, the proportion of landlords looking to purchase property has fallen from between 15% to 20% before the announcement of tax and regulatory changes in 2015 to just 7% to 10% today.
For further info: Click here to view original web page at www.propertywire.com
