Buy-to-let purchase activity saw a spike in June, according to new data from Legal & General’s SmartCriteria tool, which has been designed to track product searches from over 8,000 advisers and ultimately sheds light on purchase trends across the UK.

Searches for consumer buy-to-let mortgages grew by 7%, while those that were done on behalf of portfolio landlords soared by 21%.

A look at the market, a year ago

This time last year in 2021 it was reported that buy-to-let property investment was still profitable, however, there were changes made to the management of properties and tax which made investing back then, in June, slightly more challenging.

Investors were still earning strong yields, which were paired with great capital appreciation potential, especially in certain areas of interest.

Additionally, there were a number of competitive products on the mortgage market which saw positive growth happen in the mortgage sector with steady, low-interest rates that made borrowing more affordable.

There were a few unwelcome tax changes made, along with increased legislation which included new electrical safety standards for all privately rented properties.

While some of these additional regulations weren’t received with open arms, it did continue to professionalise the industry and increase standards in the private rented sector, and the rewards of these changes can now be felt in the current market of 2022.

The resilient bank of Mum and Dad

The nation has been feeling the pressure of the current cost-of-living crisis – however, the data collated in June suggests that family members continue to play a key role in helping first-time buyers onto the property ladder.

It was noted that ‘first-time buyer’, ‘first-time landlord’, and ‘non-owner occupier’ was the third most used criteria point, while ‘joint borrower sole proprietor’ took the fifth spot.

Despite the broad economic crunch, the number of searches for guarantor and family assists mortgages, along with gifted equity and concessionary purchase mortgages both remained comparable to May – only slightly dropping by 1% and rising by 0.4% respectively.

Key role players in the market

The vitality of the market greatly depends on the demand for specialist products, which remained high throughout June.

Searches on behalf of applicants purchasing discounted market sale properties shot up by 66% and let-to-buy applicants also rose by 7%.

As in May, most searches were carried out on behalf of applicants with a VISA.

Danny Belton, head of lender relationships at Legal & General Mortgage Club, shared his viewpoint on the data collected and commented: “It is reassuring to see strong demand across the board despite wider economic pressure. The fifth consecutive base rate rise, which came mid-month, does not seem to have dented the high levels of activity in the market and brokers and lenders alike are still as busy as ever.”

Belton concluded: “With product criteria changes coming thick and fast, advisers have a crucial role in reassuring and educating buyers through what might be a more difficult mortgage journey.”