Buy-to-let lending hits five year high – CML

Figures for the 2nd quarter of this year indicate that the buy-to let market is still strong.

Lenders advanced 40,000 buy-to-let loans worth £5.1bn in the three months to June. Both the number of loans and the value of lending jumped by roughly a fifth on the previous quarter to reach the highest levels since the third quarter of 2008.

The total value of buy-to-let lending was also 31% higher than the same time last year.

CML head of policy Jackie Bennett said: “Strong rental demand is contributing to the continuing expansion of the buy-to-let sector, but growth is also being helped by improved conditions in funding markets and more widespread availability of mortgages.

“These conditions are creating more opportunities for landlords to remortgage, as well as helping to fund increased activity in the mortgage market more generally. This spring, we have seen the highest levels of lending to first-time buyers since 2007, alongside the continuing recovery in the buy-to-let market.”

Buy-to-let mortgages represented 13.3% of all outstanding mortgage lending, compared to 13.1% in the previous quarter and 12.9% a year earlier.

In terms of use, the number of buy-to-let loans for house purchase increased by 15%, while the total value jumped 19%. The number of remortgages grew by almost a quarter and the value increased 29%.

The proportion of buy-to-let mortgages in arrears of over three months crept up from 8.3% in the first quarter of 2013 to 8.4% in the second. The possession rate was 0.09%.

London is still the “engine room” underpinning these increases but there are increasing signs of strength in the large regional centres

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