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Landlord confidence recovers as residential business slips

Written by: Owain Thomas
An increase in landlords remortgaging is offsetting a fall in purchase business
Landlord confidence recovers as residential business slips

Landlord confidence is showing modest signs of recovery as professional landlords adjust to the new tax regime, according to One Savings Bank (OSB).

In its half-year results the lender, which includes Kent Reliance and Interbay, said it had seen demand for buy-to-let remortgaging increase to supplement the industry-wide drop in landlord purchases.

It noted that demand for five-year fixed rate deals in the sector continued to grow and it remained a very competitive market.

“The core buy-to-let segment is demonstrating robust demand from professional and incorporated landlords with high levels of refinancing partially offsetting lower purchase activity and reduced demand from amateur landlords,” the lender said.

Remortgaging lending

Under its Kent Reliance brand, remortgages represented around 58% of new lending.

Professional or multi-property landlords accounted for 79% of buy-to-let completions by value during the first half of 2018 and limited company purchase applications rose to 71% of total purchase applications, up from 69% in 2017.

Five-year fixed rate products continued to rise in popularity totalling 59% of completions, up from 43% at the end of 2017.

However, the value of its residential lending slipped 16%, although OSB said it was seeing good levels of applications from its new range of products launched towards the end of the second quarter.

Group CEO Andy Golding said: “While regulatory and tax changes in the buy-to-let market have dampened industry-wide demand for new purchase mortgages, this has been partially offset by an increase in demand for remortgages.

“We focus on the professional buy-to-let market where trends remain positive. Demand for five-year fixed rate products has risen noticeably across the market with competition continuing to increase.”

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