Buy to let lending is down despite what lenders sayMake Text Bigger
Buy to let mortgage lending, in the first three months of this year, was down on the previous quarter despite the number of loan deals and lenders increasing.
Lending for the quarter ending March 31was 27,600 new loans, totalling £2.9 billion, according to the Council of Mortgage Lenders, the industry voice of the UK’s major banks and building societies.
This was 3.5% less than the 28,600 new loans totalling £3 billion in the final quarter of 2010 – when lenders blamed bank holidays and the freezing weather for a poor performance.
The only good news was the figures represent an improvement on a year ago when buy to let lenders advanced £2.1 billion on 22,000 new mortgages.
In a similar period, the number of mortgage deals has jumped 55% from 299 to 463, and the number of buy to let lenders has increased from 48 to 64, according to data released by independent financial monitor, Moneyfacts. (See article: Buy to let landlords offered choice of 463 mortgage deal)
Overall, the total outstanding number of buy to let loans rose from 1,305,000 at the end of 2010 to 1,313,200 at the end of March 2011, with a rise in the outstanding value of buy to let lending from £151.5 billion to £152 billion.
Buy to let lending accounts for 12.3% of total outstanding mortgage lending by value, and 11.6% of mortgages by number.
Average loan to values are 75%, with average rent cover at 125%.
At the end of March, loans in three months of arrears were 1.62% on loans without a receiver and 2.24% when including loans with a receiver appointed.
Around 1,700 buy to let homes were repossessed (0.13%) in the quarter, according to the CML.
CML director general Michael Coogan said: “Buy to let continues to progress positively in the context of a stable, but still low-volume, overall market.
“Demand for rental property remains strong, and as more funding becomes available we would expect to see buy to let lending increasing.
“The performance of buy to let loans is also holding up well, and the differential between arrears rates in the buy to let sector and the owner-occupier sector has narrowed substantially so that there is now only a modest difference between them.”
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