Buy-to-let mortgages made up 17% of all mortgage cases in the three months to October, according to a new report by Paragon Mortgages.
Fascinatingly, buy-to-let mortgages and borrowing from first-time buyers was collectively more popular than remortgages in the third quarter, the findings show.
John Heron, Paragon’s managing director, commented: “It is positive for the buy-to-let market to see application numbers increase after weaker numbers in the previous three quarters.
“Hopefully, this will be a sign of things to come for the buy-to-let market after a period of uncertainty following regulatory changes, reduced tax relief and the uncertainty around Brexit.”
The research also reveals that fixed rate mortgages, which have been rising steadily in popularity since 2011, now account for almost 90% of all products, with 39% of homeowners opting for five-year products to benefit from better rates.
However, two-year products remain the most popular, making up almost half – 47% – of all cases, although the rate of growth has eased as people seem to be gradually prioritising low rates over the length of term.
According to Paragon Mortgages’ latest Financial Advisors Confidence Tracking (FACT) Index report, based on interviews with 199 mortgage intermediaries, just one in 10 mortgages in Q3 2017 were a tracker or variable rate.
Heron added: “With interest rates gradually increasing, after a long period of historic lows, it is not surprising that homeowners are racing to fix the cost of their mortgage for longer terms.
“Over the coming months, it is likely that we will see a further surge of borrowers locking into fixed rates before they climb higher.”