More than a third of landlords with buy to let mortgages plan to refinance at least one property over the coming year, according to ModaMortgages’ analysis of new research from Pegasus Insight.
The latest Landlord Trends report found that 38% of landlords with outstanding buy to let borrowing intend to remortgage or complete a product transfer within the next 12 months.
Becki Fraser-Tucker, Head of Sales at ModaMortgages, said: “Refinancing is set to remain firmly on landlords’ agendas over the next year. For many, the priority will be finding a straightforward route onto a new deal that fits their current borrowing needs and helps them manage costs with confidence.”
Refinancing intentions are particularly strong among portfolio landlords. Almost half (46%) of those with four or more buy to let mortgages expect to refinance during the coming year, compared with 30% of landlords holding between one and three mortgages.
Rather than reviewing a single loan in isolation, landlords planning to refinance expect to consider an average of almost three mortgages each. This suggests many will be taking the opportunity to look across more than one property as existing deals approach maturity.
Fraser-Tucker continued: “For landlords with several mortgages, refinancing can quickly become a sizeable exercise. A simple and transparent process matters, especially where the aim is to replace existing borrowing rather than raise additional funds. A pound-for-pound remortgage can provide a clear route forward for landlords who simply want to move an existing balance onto a new deal.”
The research suggests this demand is likely to remain elevated. Around four in ten mortgaged landlords have consistently said they plan to refinance over the past 18 months, compared with closer to three in ten before mortgage rates began rising in 2023.
Refinancing activity is also taking place across different ownership structures. While most properties scheduled for refinancing are held in personal names, limited company borrowing accounts for a greater share among landlords with larger portfolios.
Fraser-Tucker added: “The research shows that refinancing is relevant to landlords with a wide range of portfolio sizes and ownership structures. In my view, the strongest propositions will be those that keep the journey clear, provide certainty over the criteria and make it easy for brokers to establish whether a straightforward remortgage is the right fit.”
The findings come as landlords continue to keep a close eye on profitability and the cost of running their portfolios. More than half of those surveyed believe their rental portfolios are less profitable than five years ago, reinforcing the importance of reviewing mortgage arrangements before existing deals expire.
Fraser-Tucker concluded: “Refinancing should not be viewed as a box-ticking exercise at the end of a fixed term. It’s an opportunity for landlords and their brokers to check that the finance remains appropriate for the property and the landlord’s plans, while ensuring the process itself is as smooth and straightforward as possible.”
