A survey of over 200 intermediaries found 50% would be switching their attention to this type of business in reaction to the surge in take-up of five-year fixed rate deals in the run up to introduction of the stamp duty surcharge in April 2017.

According to Paragon, industry data showed the number of five-year fixed buy-to-let completions in the six months to the end of March 2016 was 121% higher than the same period in 2015.

The introduction of new buy-to-let underwriting rules in 2017 provided further stimulus to the five-year fixed market, with this length of deal continuing to grow in popularity since.

Moray Hulme, Paragon Director for Mortgage Sales, said: “There was a significant increase in five-year fixed rate business written in the run-up to the introduction of a 3% buy-to-let Stamp Duty surcharge in April 2016 and those deals are due to expire in the coming months.

“Brokers are extremely busy getting deals over the line ahead of the end of the Stamp Duty holiday, but the prospect of remortgage business will give them some hope that they won’t face a complete cliff edge of business as we head into April.”

Short term finance

The study of brokers also revealed many would be attempting to meet clients’ needs for short-term finance and diversifying into holiday lets, selected by 16% and 13% of brokers respectively.

Meanwhile, four in 10 brokers said they had no plans to cope with a decline in business once the Stamp Duty holiday ended.

Paragon’s survey found nearly six in 10 thought case volumes would be negatively affected after the Stamp Duty break deadline.

The majority of brokers, 47%, opted for the most negative forecast, expecting business to ‘significantly decrease’, with ‘slightly decrease’ the outlook for 12% of respondents, making it the next most popular choice.

Conversely, just over one in ten expect case volumes to actually increase in quarter two of 2021, 9% think slightly and 2% significantly.

Hulme added: “The Stamp Duty break has provided welcome stimulus to business and has helped the buy-to-let market bounce back.  Once the scheme ends we expect the landscape to be quite different when compared to the one we have seen over the past few months, with many expecting cases to reduce significantly.

“While we recognise that this does result in some uncertainty for the industry, we should be reassured when we remember how mortgage application numbers recovered after taking a dip in 2016 when new rules meant landlords were required to pay an additional 3% Stamp Duty on property purchased to rent over and above standard rates.”