There has been a recent rise in buy-to-let remortgaging with this sector increasing every year from 2009 to 2019, representing a decade of growth.
Figures from UK Finance show that in 2008 there were 114,740 remortgages but in 2009 cases fell sharply to 32,850. Since then, the buy-to-let market has increased and in 2019 remortgaging peaked at 187,900 loans. When the pandemic started, we saw a fall in lending across all markets, with buy-to-let remortgaging numbers falling to 163,300 in 2020. However, in the first quarter of this year we saw a rise in numbers compared to the last quarter of 2020, as 39,700 loans were issued.
There has also been a rise in property investors remortgaging to release equity from a property either to grow their investment portfolio or to carry out improvements to maximise the rental income and property value. House prices are rising meaning that Loan to Value rates are lower, providing an opportunity for equity release.
Since all rental properties have required an Energy Performance Certificate (EPC) rating of at least E, but the government has its sights on all homes being rated C or above by 2030. This has resulted in landlords wanting to carry out home improvements such as new windows, heating systems or improved insulation. Many lenders are now offering green mortgages as an incentive for this.
The Scottish buy-to-let market
According to the latest Nationwide House Price Index, Scotland has recently been shown to have the UK’s best rental yields in the UK with an average yield of 5.8%. In addition, according to a survey by the National Residential Landlords Association, over two thirds of landlords surveyed were confident about the market in the coming year.
Last year, according to Zoopla, five out of the top ten hot spots where landlords could find the best rental returns were in Scotland – with Glasgow and Stirling providing typical yields of 7.6% and 7.5% respectively.
If you are considering taking out a buy-to-let mortgage or would like to discuss remortgaging, talk to us at The Mortgage Hub. We can find the right deal for your individual circumstances and needs.