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Paragon forecasts continued rise in complex BTL business in 2020

The increase in portfolio and complex buy-to-let business seen over the past two years is set to continue in 2020, according to Paragon’s director of sales, Moray Hulme.

Recent tax changes have forced landlords to look for more efficient ways to structure their business, driving an increase in demand for mortgage products for incorporated and limited liability partnerships.

Research of Q3 2019 data by BVA BDRC, revealed that the number of landlords that expect to purchase property in a limited company structure has almost doubled in under two years. This, alongside the Prudential Regulation Authority’s (PRA) more detailed underwriting approach for portfolio landlords, has resulted in specialist lenders like Paragon tailoring products to match more complex requirements.

Paragon also predicts intermediaries will refocus on purchase business in the buy-to-let market, following a significant increase in the popularity of longer-term fixes since 2015 reducing remortgage opportunities.

Recent research by Paragon also found that larger scale landlords are three times (11%) more likely to consider buying than smaller scale landlords (4%), within an overall much smaller buy-to-let market.

Following the ban on letting fees to the proposed abolition of ‘no-fault’ eviction, Paragon believes 2020 will see the introduction of more tenant-friendly regulation, as PRS landlords play an increasingly vital role in meeting the UK’s housing need.

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