Buy-to-let mortgage searches decline as residential remortgaging rises

Mortgage search data for August indicates a decline in landlord activity, with buy-to-let purchase searches falling 22% year-on-year. Searches for landlord remortgages also saw an 8% decrease. Total combined searches for buy-to-let purchases and remortgages reached 231,609, representing a 12% drop compared to August of the previous year and a 14% decline from July.

In contrast to the decline in the rental sector, residential remortgage activity showed growth. Residential remortgage searches were 11% higher year-on-year. Data from the FCA and Bank of England noted that remortgaging accounted for 31.2% of gross advances to owner-occupiers in the second quarter, marking its highest share since the first quarter of 2024.

Buy-to-let lending mechanics differ from residential mortgages in that lenders assess the property’s rental income potential rather than the borrower’s salary to ensure mortgage coverage. Investors in this sector typically face higher deposit requirements, often necessitating a quarter or more of the purchase price.