The buy-to-let sector is enjoying a continuing level of growth according to the Council of Mortgage Lenders (CML).
Buy-to-let landlords took out 33,500 mortgages in the first three months of 2013 and gross buy-to-let mortgage lending hit £4.2 billion, compared to £3.7 billion seen in the same quarter last year.
While almost half this lending was advanced to those looking to remortgage, rather than first-time buy-to-let landlords, buy-to-let mortgages now make up 13.4% of mortgage lending, compared to 12.9% at the same time last year.
Out of an estimated 11.26 million mortgages currently active in the UK, around 1.46 million are buy-to-let mortgages.
Paul Smee from the CML said:
"The buy-to-let mortgage market is performing well, against a backdrop of robust landlord - and tenant - demand for good quality rental property. Loan performance compares favourably with the owner-occupier sector, and buy-to-let continues to grow as a proportion of the overall mortgage market.
"As the private rented sector looks likely to be the longer-term tenure in which more households may live in the future, lenders are actively looking at how they can best evolve their future lending for those landlords who may wish to offer longer-term tenancies to their tenants - although concrete landlord demand for such borrowing is not yet clear."
A report released by HSBC last month identified buy-to-let "hotspots" across the UK. The table below sets out some of the data from their report:
|Location||Average property price||Average rent per month||Gross rental yield|
|Kingston Upon Hull||£69,519||£450||7.77%|
(Figures supplied by HSBC)
According to the CML, only 8.3% of all mortgages in arrears were buy-to-let mortgages, compared to 10.5% in the same quarter last year, although the repossession rate was slightly higher in the buy-to-let sector (0.11%) compared to that for those living in the property they own (0.07%). Recent figures from the
Countrywide Quarterly Lettings Index suggested that rental payments had risen in every area in the UK apart from in the South-East of England and Scotland in the first quarter of 2013.