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31st Dec 2021|News|Sales|Lettings|

Buy-to-let remortgage activity to surge in 2022

Buy-to-let remortgage transactions will see a surge in activity in 2022, Paragon Bank has predicted.

A number of 5-year fixed rates are set to mature, because there was a surge of activity prior to the introduction of mortgage stress tests from the Prudential Regulation Authority in 2017.

There was a rise in 5-year fixed rate mortgages, from 3,008 to 4,167, written between December 2016 and January 2017

Moray Hulme, mortgage sales director at Paragon Bank, said: “Five years ago, the PRA introduced new underwriting standards that required lenders to take a more holistic approach to assessing mortgage affordability.

“This correlates with 2017 seeing a significant increase in the volume of mortgages fixed over five years. As a result, we’re anticipating strong levels of remortgage business throughout the next year.

“This presents a fantastic opportunity for brokers to generate business and, with the process often involving additional borrowing, we recommend that they do this at the earliest opportunity.”

Since the start of the pandemic, around a third of employees have started to work remotely to some degree.

Due to the impact of the Omicron variant the government has requested for more people to work from home.

Continued pressure on property supply

Paragon has argued that the lack of housing supply has been accelerated by the pandemic, not caused by it.

Therefore it predicted that the government will face mounting calls to balance policy between protecting tenants while removing fiscal and regulatory barriers to private investment.

Hulme added: “The sector has shone during another incredible year and with 2022 shaping up to be equally eventful, we look forward to working with our industry partners to support landlords in providing good quality, affordable homes for millions of tenants in the UK.”