Recent data unveiled by technology firm Twenty7tec has revealed a notable decline in buy-to-let (BTL) mortgage enquiries across the United Kingdom for December 2023. The statistics indicate a shift in trends within the property investment landscape.
Compared to November’s figures, the number of BTL mortgage searches plummeted by 32.8%, totalling 175,108 inquiries. Despite this decline, the realm of property valuations and loan requisites for BTL investments experienced marginal upswings. The average BTL property valuation surged by 0.9% to reach £318,599. Simultaneously, the average loan amount required escalated by 1.2%, peaking at £186,144.
Furthermore, there was a noteworthy increase in the incomes of BTL applicants. The average combined income rose by 7.6%, reaching an impressive £84,333.
London, mirroring the national trend, witnessed a dip in BTL mortgage inquiries with only 8,220 searches, marking a 33.6% decline. The average BTL property valuation in the capital stood substantially higher at £551,486, accompanied by an average loan amount of £302,447. Notably, the average combined income of applicants in London soared to £93,844.
Nathan Reilly, a director at Twenty7tec, remarked, “December is traditionally a quieter month post-November, but December 2023 exhibited more activity than previous year-end periods. Typically, January sees a remarkable 70% surge in the market compared to December. Moreover, January figures often surpass those of the preceding November. Hence, we anticipate a bustling period leading up to the interest rate decision on February 1, 2024.”
However, Twenty7tec’s data also sheds light on a downturn in other segments of the mortgage market. Searches for purchasing mortgages plummeted by 36.8%, while inquiries for remortgaging experienced a 29.3% decrease. First-time buyers displayed reduced interest as well, with their searches declining by 39.6%.
Notably, there was a shift in the distribution of fixed mortgage product searches in December. Two-year fixed mortgages constituted 49.65% of all searches, while mid-term fixed mortgages (ranging from three to five years) accounted for 31.95%. Longer-term fixed mortgages spanning five to ten years represented 18.4% of the searches, marking a three-year low in this category.
The evolving landscape in December 2023 appears to set the stage for potential market dynamics, particularly leading into the impending interest rate decision, with fluctuations observed across various mortgage sectors.
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