Buy-to-Let Landlords Driving the UK Mortgage Market: New Research Reveals Insights

The UK mortgage market remains robust despite the challenges posed by the current economic climate, rising mortgage rates, and affordability issues. New research conducted by Legal & General has shed light on the key factors driving activity in the market, with buy-to-let landlords playing a significant role. In addition, demand for interest-only mortgages is on the rise, and overseas buyers continue to show interest in the UK property market. In this blog post, we will explore the insights provided by Legal & General’s research and delve into the factors shaping the current mortgage landscape.

Buy-to-Let Landlords: Key Buyers Driving the Market

Despite the various obstacles in the housing market, buy-to-let landlords are actively participating in property investment. Legal & General’s research on its Ignite platform indicates a healthy appetite among buy-to-let landlords and homeowners to secure borrowing. Searches for ‘rental income’ on the platform increased by 38% in June, while ‘top slicing,’ a solution sought by landlords to cover their mortgage payments when rental income falls short, saw a 49% increase in searches. Furthermore, multi-let unit freehold blocks witnessed a surge in popularity among buy-to-let landlords, with a 32% rise in searches for this term.

Interest-Only Mortgages: Gaining Popularity Among Buyers

Interest-only mortgages have long been favoured by buy-to-let landlords and are becoming increasingly popular among homeowners as well. With this mortgage type, monthly payments cover only the interest on the borrowed amount, not the principal loan. The appeal lies in reduced monthly payments, which can be advantageous for those looking to manage their cash flow effectively. Legal & General’s research revealed a 53% increase in searches for interest-only mortgages in June, indicating a growing interest in this type of borrowing as interest rates remain high.

Overseas Investors Fuelling Growth in the UK Housing Market

Overseas buyers continue to be a driving force behind the growth of the UK housing market. Legal & General’s research found a 16% increase in searches from overseas customers in June. The UK’s property market has long been attractive to foreign investors, particularly those seeking buy-to-let opportunities in strong rental markets. While London remains a traditional hotspot for overseas investors, cities like Manchester, Birmingham, and Sheffield are gaining popularity due to competitive property markets, thriving job opportunities, and high rental demand.

Advisers: A Crucial Role in Navigating the Mortgage Market

Amidst the complexities of the mortgage market, advisers play a vital role in supporting buyers and ensuring they have access to a wide range of options. Jodie White, Head of Mortgage Products & Transformation at Legal & General Technology, emphasises the importance of advisers using new technologies to manage demand for mortgage advice across various sectors. With the current market conditions and shifting buyer preferences, professional advice becomes even more crucial in making informed decisions.

Bottom Line

Legal & General’s research reveals that the UK mortgage market remains resilient, driven by active buy-to-let landlords, growing interest in interest-only mortgages, and the continued appeal of UK properties to overseas buyers. Amidst these evolving trends, the guidance and expertise of mortgage advisers are invaluable for buyers seeking optimal borrowing solutions. At Reliance Residential, we are committed to providing exceptional service and support to our clients, empowering them to make well-informed decisions in the ever-changing mortgage landscape. Visit our website to explore our services and take the first step towards securing your dream property.