Buy-to-let lending reaches highest level since 2008

The Momentum UK Team 08 August 2013

Landlords have benefitted from strong tenant demand, as buy-to-let lending reaches £5 billion according to the Council of Mortgage Lenders (CML).

The figures, released today by the CML, show that a total of 40,000 Buy-To-Let (BTL) mortgages were advanced by UK lenders in the three months to June, up 19% from 33,500 in first quarter of the year. The value of buy-to-let mortgages has reached £5 billion, the highest since the start of the downturn and up 31% on the previous year.

Jackie Bennett, head of policy at the CML, said that strong rental demand and cheaper mortgage rates, partly due to the government’s Funding for Lending Scheme, are behind this increase:

“These conditions are creating more opportunities for landlords to remortgage, as well as helping to fund increased activity in the mortgage market more generally.”

Although lending remains much lower than at the peak of the housing market in the third quarter of 2007, when more than 93,000 buy-to-let mortgages were advanced, the property market is beginning to show signs of optimism. George Spencer, chief executive officer of Rentify, the online lettings company, said:

“It is not just the residential mortgage market which is picking up dramatically - the buy-to-let market is also seeing renewed confidence from landlords, with the number and value of loans at their highest level in five years.

“This growth is fuelled by a renewed appetite from investors - both experienced and novice alike, along with better availability of buy-to-let mortgages at lower rates and with looser criteria than at any time in the past five years.”

Separate figures also released today by the CML showed that residential repossessions fell 4% to 7,700 in the second quarter, equivalent to 0.07% of all mortgages. The number of mortgages in arrears of 2.5% or more of the balance also saw a decline to 157,700 in 3 months to June. the lowest number recorded since the third quarter of 2008.

Spencer continued:

“We expect the market to continue to grow at an impressive rate in coming months. We are adding rental properties to our website at the rate of 600 a week and now have 140,000 landlords and tenants registered with us as both sides look for alternatives to traditional high-street letting agents.”