Buy to let landlords turn to remortgaging as new purchases stall

Landlords are shifting their focus from expansion to protection, as new data shows a slowdown in buy to let activity and a rise in remortgaging.

According to Twenty7tec, BTL purchase searches have fallen by 13.67% over the past year, while remortgage searches are up 6.05%.

The numbers suggest that after years of steady growth and a boom that peaked in September 2022, landlords are prioritising stability over growth.

The firm’s head of lender relationships, Nakita Moss, said: “We’re seeing a clear behavioural shift as landlords respond to higher borrowing costs and tighter yields.

“More landlords are focused on refinancing rather than expanding, taking advantage of stabilising rates to secure long-term certainty.”

She adds: “The era of portfolio growth has paused – for now it’s about resilience and risk management.”

Searches down to a third

The latest October figures reveal that buy to let purchases now make up just a third (33.1%) of all landlord searches.

The rest are remortgage-related, indicating that most activity in the sector is now driven by efforts to manage existing portfolios rather than grow them.

Across the broader mortgage market, lenders remain upbeat.

Twenty7tec recorded a record 28,835 live mortgage products by the end of October – that’s thee highest number on record.

It says the number points to strong competition and renewed confidence among lenders despite a more cautious buying environment.

Landlords are locking in rates

Landlords are expected to watch closely for announcements on property taxation, stamp duty thresholds and potential rental sector incentives.

After years of shifting regulation and diminishing tax relief, Twenty7tec says many see this as a critical moment for rebuilding confidence in the private rented sector.

Last year’s Autumn Budget hit investors with a rise in the additional stamp duty rate, or ‘higher rate surcharge’, on second homes and investment properties.

The surcharge increased from 3% to 5% on 31 October 2024, leading to an immediate slowdown.

In November, buy to let transactions fell 9.36% month-on-month, followed by a 35.28% drop in December.

Nathan Reilly, the firm‘s commercial director, said: “The figures suggest a market in transition: steady, active and cautious.

“Landlords appear to be locking in rates while they can, signalling confidence in the long-term rental market but restraint when it comes to expansion.”

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