There was an increase in buy-to-let activity in the first three months of 2020, the latest mortgage lending data shows.
According to UK Finance’s Finance Household Finance Review, buy-to-let activity increased 7% in Q1 2020, with 5,600 purchase mortgages in March compared to 5,300 in the same period a year earlier.
Remortgage buy-to-let deals remained flat, unaffected by the coronavirus and lockdown, which hit in the latter part of March.
John Goodall, CEO at Landbay, said: “Buy-to-let started the year really strongly and this is reflected in the UK Finance figures.
“January and February saw really strong demand for new purchases. UK Finance shows a 7% year-on-year increase, but what we saw was significantly in excess of that. While the Coronavirus lockdown from mid-March has hampered this, there is still a notable demand from landlords and investors.
“What these figures don’t show is the effect of payment holidays. While there is demand, borrowers who are trying to take out new mortgages whilst also taking payment holidays on existing parts of their portfolio may find it harder to buy than they did before.”
Goodall believes that as soon as confidence returns the market should also return to normal, although he does not expect a ‘V’ shaped recovery, but a longer, more gradual increase.
He added: “Fundamentally it’s about demand and supply. The figures showed a drop in first-time buyers even before Covid-19 hit and following the pandemic it is highly likely that people will be renting for much longer, so the need for private buy-to-let will be greater than ever.”