Mortgage brokers are predicting a rise in buy-to-let (BTL) business over the next 12 months on the back of landlords expanding their portfolios and strong remortgage levels, according to new research from Paragon Bank.

Paragon’s research, which has tracked broker trends since 1995, found that one in five brokers expect to introduce more BTL business in 2020 – compared to 11% who said it would fall. The research found brokers are expecting to do 0.8% more business this year, the second quarterly increase in a row.

The latest data also suggested that during the final quarter of 2019, the proportion of landlords obtaining BTL finance for portfolio extension had risen to its highest level since the first quarter of 2017. Paragon revealed 24.5% of BTL mortgages were written for portfolio extension – while 50% was for remortgaging purposes, a fall from 55% during the previous quarter.

Overall, brokers said that BTL had accounted for 17.7% of all business during the final quarter of 2019, the highest proportion for a year.

Paragon managing director of mortgages, Richard Rowntree, commented: “BTL lending has been driven by remortgage business in recent years, so it’s great to see the proportion of lending for portfolio extension purposes increase and hit its highest level for nearly three years.

“It’s also encouraging to see that the balance of brokers expecting to write more BTL business is positive for 2020 as confidence has been subdued for much of the past four years. These are green shoots and we hope that they will continue throughout this year on the back of a more certain regulatory, economic and political environment.”

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