Paragon reports remortgage decline in Q2

Posted on Sunday, August 10 by Joy Tibbs

Research from buy-to-let specialist Paragon Mortgages shows that the proportion of remortgages handled by intermediaries during the second quarter fell by 6% over the past year. The proportion fell from 36% during the second quarter of 2013 to 30% during the second quarter of 2014.

Remortgages continue to be the most common form of mortgage borrowing; however, the data showed a 4% drop in the number of remortgages processed during the quarter.

By contrast, there was a 2% increase in the proportion of buy-to-let mortgages processed since the first quarter, accounting for 23% of all mortgages. Intermediaries also reported a slight increase in the proportion of mortgages for first-time buyers over the past year, from 17% during the third quarter of 2013 to 19% during the second quarter of 2014.

At buy-to-let level, the proportion of remortgages fell 4% quarter-on-quarter from 30% to 26%. This was in stark contrast to the first quarter, when the proportion of buy-to-let remortgages rose from 28% to 30%.

Managing director at Paragon Mortgages, John Heron, said: “The declining proportion of remortgages against the increased proportion of first-time buyer mortgages represents a continuation of a trend that has been apparent over the past couple of years as the market has gathered momentum.

“It is promising to see an overall increase in the proportion of buy-to-let mortgages being processed, which again highlights the steady growth we are experiencing in the market.

“There is a clear declining trend in buy-to-let remortgages, with the proportion having dropped significantly since a pre-crisis peak in 2007-08 followed by a steady and continuing decline.

“It is also a positive step to see some growth in the number of first-time landlords seeking buy-to-let as new blood in this market is important to a strong sustainable future for the private rented sector.”

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