Buy to let portfolios set to expand according to mortgage expert

Landlords who are remortgaging are currently doing so primarily to build a war chest.

That’s the view of mortgage brokerage Mortgages for Business, which says some 30 per cent of property investors are now taking out a buy to let remortgage with a view to expanding their portfolio and growing their cash reserves.

The broker’s research also indicates that 46 per cent of landlords are increasing the size of their loans – significantly higher than the long-term average of 38 per cent.

“Our research suggests the number one priority of active, professional landlords is to set themselves up with a war chest so they can look for growth. Smart landlords know that the time is coming to bag some bargains and start expanding portfolios. Increasingly, that is where their remortgaging priorities lie” says managing director Steve Olejnik.

“In 2019, a lot of the landlords we worked with were looking to guard against risk. That’s shifting now as opportunities to purchase cheap properties presents themselves. With properties prices poised to drop before the end of the year, the balance between risk and reward is shifting. It will be interesting to see how landlords’ investment strategies adjust to changing tenant demand” he adds.

However, landlords remain somewhat risk-averse; they are increasingly looking to manage their cashflows. Lowering monthly payments is now the second most important concern when remortgaging according to the new Mortgages for Business survey – it was the third in 2019.