The percentage of brokers who expect to write more buy-to-let (BTL) business in the next 12 months rose from 41% in June to 49% in September, according to Paragon Bank’s Financial Adviser Confidence Tracker (FACT) Index.
When asked to describe demand for buy-to-let mortgages at present, 48% of brokers indicated that it is ‘strong’ or ‘very strong’.
This is up from 26% in June 2020, and a substantial increase when compared to the same time last year, when only 5.5% of brokers felt demand was either ‘strong’ or ‘very strong’.
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One year ago, only 17.5% of intermediaries expected to do more business over the next 12 months.
In 2019, the majority (65.7%) expected business levels to stay the same, whereas this year 36% expected no change.
When asked to rank the impact of changes announced in Chancellor Rishi Sunak’s Summer Statement, the majority of brokers placed the temporary cut in Stamp Duty Land Tax in first place.
Planning Reforms were the second most popular choice, followed by Short-term Home Building Fund Extension, with Green Homes Grant deemed to be the initiative that would stimulate the market the least.
Despite positive outlooks for the next year, some brokers expect to see a dip in mortgage activity following the end of the scheme in March 2021.
Richard Rowntree, managing director for mortgages at Paragon, said: “Our latest FACT Index has come at a really interesting time because it highlights how the market is strong at the moment and looks set to continue to perform well over the coming months.
“Brokers feel that a significant driver of this is the Stamp Duty holiday so we may see a different landscape once the initiative comes to an end in March next year.
“History has shown that we can see peaks and troughs in activity in the lead up to and following important policy changes and these are just indicative of the dynamic nature of the market.
“I feel that demand will ease off to more typical levels, so when we look at it over a longer term, we will see a return to stability.”