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crazypabs

BTL Sales Volume vs Mortgage Sales

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Good morning everyone,

as my first post I hope you find this to be an interesting observation on my part.

I'm curious if anyone else has considered the correlation between the massively reported drop in BTL sales volume compared to the purported increases in new BTL mortgages,

evidence:

btl sales...

http://www.cityam.com/255338/revealed-deeply-worrying-decline-buy-let-sales-after

btl mortgages...

http://www.mortgageintroducer.com/buy-let-purchases-take-bigger-market-share-q4-2016/

my opinion is that short of the mortgage companions talking their usual hogwash to falsely reflect the market, I believe that the increase in btl mortgages isn't in fact due to the volume of sales but actually due to the change in organisational structure, I.e. Landlords changing from personally owning property to selling them to a special purpose vehicle limited company to save tax in the longer term, hence the need to refinance the mortgage.

anyone else seen this?

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12 hours ago, crazypabs said:

btl mortgages...

http://www.mortgageintroducer.com/buy-let-purchases-take-bigger-market-share-q4-2016/

my opinion is that short of the mortgage companions talking their usual hogwash to falsely reflect the market, I believe that the increase in btl mortgages isn't in fact due to the volume of sales but actually due to the change in organisational structure, I.e. Landlords changing from personally owning property to selling them to a special purpose vehicle limited company to save tax in the longer term, hence the need to refinance the mortgage.

anyone else seen this?

I'd hesitate to rely too much on those Mortgages For Business figures. As best I can see there are no disclosures as to where those figures are coming from. The company producing them looks to be first and foremost a mortgage broker. It's theoretically possible that those numbers reflect data gathering from lenders but it is also possible it's just the flow of mortgage through their own mortgage broking business being touted as an index so that they can raise their profile by placing articles in the industry press.

The CML do release data on the balance of approvals for purchase and remortgages in the buy-to-let mortgage lending

Chart 2: Number of loans for buy-to-let, 2007-2016

20161208-uk-lending-press-release-chart-

Source

These CML numbers will be damn near all the market and they support your suggestion that the total number of loans is dominated by remortgaging and that loans for new purchases are way down. Worth noting that some of these new loans will be a new buy-to-let investor buying out an old one so may not result in an addition to the total stock of buy-to-let loans or properties.

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