Welcome back to the Experience Invest blog, where we bring you the latest UK residential and commercial property news. On that note, recent reports that demand for specialist ‘buy-to-let mortgages’ could be set to increase in the first few months of 2016 captured our attention.
First introduced in 1996, ‘buy-to-let mortgages’ have been enabling investors to purchase or refinance residential property relatively successfully for the last two decades. An estimate from the Royal Institution of Chartered Surveyors (RICS) suggests average UK rents rose by 3% in 2015. RICS further predicts that the cost of renting a house in the UK could increase at a faster pace than the price of purchasing a residential property throughout the next five years.
Activity in 2015
Specialist brokers, Mortgages for Business recently shed more light on buy-to-let mortgage sector activity. Online industry publication Property Wire reported that according to Mortgages for Business, buy-to-let remortgage deals outstripped purchases by more than two to one last year, accounting for 64% of market activity in 2015.
Multi-unit freehold blocks made up 88% of remortgaging activity in 2015. Meanwhile, houses in multiple occupation accounted for 78% of buy-to-let remortgaging deals last year. Commenting on this data, Mortgages for Business managing director David Whittaker said: “For some time now landlords have been making considerable savings through remortgaging. Many have also been releasing equity to make improvements and plan further purchases.”
But Whitaker expects this trend to reverse in the first few months of 2016. Continuing, the managing director explained: “I anticipate that we will see a reversal of this trend in the first quarter of this year as landlords hurry to expand their portfolios before the stamp duty surcharge kicks in on 1st April.”
Elaborating, Whitaker noted: “The number of enquiries for purchase finance is already well ahead of where we were this time last year, particularly from those looking to sell their personally owned property into a corporate vehicle.” Mortgages for Business found that the number of lenders operating in the market stayed static, at 33, in 2015. However the number of buy-to-let mortgage products increased slightly to an average of 975, in the same period.
Experience Invest is a London-based independent property company specialising in residential investments, student property and care home investments. The company operates across the UK and internationally, and is regularly featured in the property news – see The Telegraph, on Yahoo Finance, and by Reuters for examples of recent articles.
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