Professional landlords dominate buy-to-let

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by Gill Montia

Buy-to-let lender, Paragon, has published its latest survey of 200 mortgage advisers and brokers, which shows that the buy-to-let market is increasingly dominated by professional landlords who are looking to grow their portfolios.

According to the lender’s research, the number of novice landlords applying for loans has been in decline since May 2001, when four out of 10 buy-to-let mortgages were taken out by first-time landlords.

Meanwhile, applications for remortgages and loans to buy addition properties have been rising steadily.

In the three months to the end of February, 45% of landlords applying for loans were remotgaging and 34% were seeking to extend their portfolios.

Currently, only around 16% of buy-to-let mortgage business comes from investors making their first purchase and this figure is likely to decline because since the advent of the credit crisis and the slowdown in the housing market, lenders have been less keen to support novice landlords.

The figures suggest that growth in the buy-to-let market is being driven by experienced landlords who are holding their investment long-term.

According to the Association of Residential Letting Agents (ARLA), the average length of time a buy-to-let investor intends to keep a property is 17 years; Paragon’s research shows that 93% of landlords have held their properties for six years or more.