Govenor of the Bank of England, Mark Carney, announced recently that the record low interest rates that have held steady at 0.5% since March 2009 are soon to increase. It has been suggested that the base rate will jump to 0.75% by summer 2015, climbing to 1% by the autumn. It is likely to rise to 2.5%, perhaps as much as 3%, before the end of 2016. It is then expected to remain locked there for quite a while.
In light of that, the findings presented by Mortgages for Business are understandable. They found that almost two-thirds (65%) of buy-to-let mortgage activity in the first three months of 2014 was for remortgages rather than property purchases – a 12% increase from the previous quarter.
Landlords with more complex properties are remortgaging at an even greater rate. Three-quarters of transactions against HMOs were remortgages, up from 69% a year ago. Of all transactions involving multi-unit freehold blocks, 81% were remortgages.
Landlords were also shown to be spoiled for choice, with there now being 586 separate buy-to-let mortgage options available – 152 more than last year, and 65 more than the previous quarter.
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