2022 set for buy-to-let remortgaging boom

The specialist lender is putting plans in place to ensure it is well equipped to manage a wave of five-year fixed rate mortgages that are set to mature throughout the next year. This is because of a steep increase in borrowers opting to fix their mortgage rates over longer terms in response to the introduction of new underwriting standards by the PRA in 2017.

Industry data shows a rise in the number of five-year fixed rate mortgages - from 3,008 to 4,167 - written between December 2016 and January 2017. This figure then increased to 10,717 over the following year to January 2018, seldom slipping below the 10,000 mark since.

Other trends Paragon expects to influence the buy-to-let mortgage market in 2022 include continued pressure on property supply and a rise in green mortgage offerings.

With the deadline for the Government’s proposed changes to EPC requirements looming, Paragon says the next year will see lenders increase their offerings that facilitate and incentivise the buying of more energy efficient homes. With a substantial proportion of the sector’s stock requiring costly upgrades to meet any new standards, lenders will also look to find new ways to support landlords with environmentally focused finance products.

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.

“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.”