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Buy to let borrowing was down 5% in the first three months of the year after a barnstorming end to 2011.
In figures that revealed buy to let is treading water rather than buoyant, new landlord loans totaled £3.7 billion, according to the latest official figures from bank and building society trade body the Council of Mortgage Lenders (CML).
Despite granting 32,300 new buy to let mortgages in the first quarter of the year, landlord lending is still running at around a third of the peak of the market in 2007.
In 2012, borrowing for buying investment property fell by 9% and remortgaging was down 1% on the previous quarter.
However, the CML pointed out that lending levels were up around 30% in comparison to the first quarter of 2011.
Lenders have shifted their focus away from residential mortgages to buy to let loans as market share continues to nudge upwards – buy to let has accounted for 12.8% of all mortgage lending so far in 2012, up from 12.6% in the previous quarter, and 12.2% at the start of 2011.
The buy to let market now totals 1.4 million loans worth £159.4 billion.
Mortgage terms averaged 75% loan-to-value with 125% rent cover.
Buy to let mortgage arrears of more than three months dropped slightly in the quarter, to 1.7% of all buy to let loans, while 1,680 homes were repossessed in the quarter.
CML director general Paul Smee said: “Even though buy-to-let lending is running at only around a third of its peak levels, the sector is continuing its gradual expansion. It has become an important part of the overall landscape of housing provision in the UK.
“It is not surprising that the buy-to-let repossession rate is higher than in the owner-occupier sector, where the focus is on forbearance and trying to keep owners in their homes. In the rented sector, expired tenancies allow repossession to be undertaken without unexpected disruption to tenant households. In absolute terms, the number of buy-to-let repossessions remains only a small proportion of total repossessions.”
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