The buy to let market continues to evolve as the housing market struggles within itself to find a new norm.  There is not likely to be a return to what was normal pre-crisis for more than a decade so say many experts and so a new norm is in the developmental stage.  The new trend is likely to be that home buyers will be much older when they make their first property purchase, fewer homebuyers will emerge, and the largest demand will be for rental property.

The latest information released by the Paragon Mortgages quarterly FACT survey revealed that in the second quarter of the year landlords were building their portfolios.  A total of 44% of those polled were adding to their portfolios which was an increase over the 40% that responded to building their property volume in the first quarter.  The second quarter response was the highest level reported in the past 12 months.

Other than buying through buy to let mortgages landlords were also using remortgages more to fund their portfolios and to secure better interest rates.  The increase in demand for remortgages grew from 31% to 32%.  The decline in buy to let was reported in new investor buy to let mortgages with a decrease from 23% in the first quarter to only 20% in the second quarter.

The survey of intermediaries revealed that 53% believe that demand for mortgages are stable while 22% described demand as strong.  The percentages of mortgage business making up the whole of offerings were:  36% remortgages, 26% next-time buyers, 20% buy-to-let mortgages and 16% first-time buyers.

John Heron, managing director of Paragon Mortgages, remarked, “Levels of buy-to-let mortgage business are healthy at the moment, but could be better. The market is still being affected by the wider financial markets and factors such as the Eurozone.

“However, we have made great strides in recent months and it is encouraging to see the percentage of landlords expanding their portfolios increasing.”