Allow Landlords to evict tenants where there are 14 days rent arrears14:34 PM, 1st October 2020
About 3 weeks ago 97
The truth is finally out about how the buy to let market performed in 2010 as the Council of Mortgage Lenders (CML) has released the latest loan figures for property investors.
The figures confirm the market expanded by 7%, with about 1.3 million buy to let mortgages worth £152 billion on the books of the UK’s major banks and building societies.
The buy to let sector accounts for around 12% of the UK’s total residential mortgages by number and value.
Lending in 2010 was £10.4 billion, up 22% from 2009, and the total number of new loans was 102,000, which was 10% higher than the previous year.
In the last three months of 2010, 28,600 new buy to let loans worth £3 billion were advanced.
Landlord mortgage arrears also fell back during the year.
The general CML view is that buy to let arrears have dropped in line with residential mortgage arrears, after running at a higher rate.
Lenders expect surging rental demand to continue
Low interest rates are a key driver of this narrowing of the gap, since most buy to let loans are interest only and gain a greater benefit from lower interest payments than capital-and-interest rates paid by other homeowners.
The CML expects strong rental demand to remain throughout 2011, mainly due to high deposits needed by first time buyers. Banks and building societies do not expect this to change in the foreseeable future.
CML director general Michael Coogan said: “Funding remains a key constraint on growth in buy-to-let lending, but demand seems to be resilient and loan performance has improved.
“Looking ahead, loan performance could potentially be adversely affected by rising rent arrears or interest rate rises, but at present there is no indication of these pressures materialising in practice.
“There is also a strong counterbalancing growth influence on the buy-to-let market, as tenant demand seems set to remain high in the face of continuing deposit constraints to entering the owner-occupier market.”
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