According to the latest Mortgages for Business “Complex Buy to Let Index” the increased choice of buy to let mortgages in the UK has caused landlords to shift their existing equity towards new purchases.
47% of the standard mortgages are now going towards new buy to let properties. New purchases made up a significantly larger proportion of lending in the final quarter of 2013, across all residential property types.
This compares to 38% representing new purchases in Q3, and 31% at the beginning of 2013.
More complex properties also formed a growing feature of landlords’ shopping lists.
Houses in multiple occupation (HMOs) saw a similar trend to standard deals. 29% of mortgages for HMOs were for new purchases in the final quarter, compared to 23% for new purchases in Q3 and 20% in Q4 2012.
Larger, multi-unit freehold blocks saw the same trend, with mortgages for new purchases making up 31% of loans against such properties, compared to 30% in Q3 and 25% at the start of 2013.
David Whittaker, managing director, Mortgages for Business, said: “At the end of 2013 landlords could choose between more than 500 mortgage products — the figure today now tops 550.
“But that choice isn’t just delivering cheaper deals — there are now even more imaginative and flexible financing options out there too — many of which offer some of the best yields.
“With demand for tenancies as strong as ever, landlords are making use of a more buoyant situation to boost their portfolios.
“As we move into 2014 capital accumulation is accelerating, and joining solid rental income to make buy to let consistently attractive to investors.”
