14:40 PM, 26th November 2010, About 11 years ago
Buy to let lending has risen by 12% supported by ongoing demand for rental property fuelled by potential homeowners who have to rent because they cannot buy.
There were 26,900 buy to let loans worth £2.8 billion advanced in the three months ending September 30, according to the latest figures from the Council of Mortgage Lenders (CML).
This quarterly rise of 8% by volume and 12% by value is the second consecutive quarterly increase in lending.
Compared to the third quarter of 2009, the volume of lending was up 14% and the value up 33%, from 23,700 and £2.1 billion. Buy to let lending is low by historical standards – running at levels last seen in 2002 – and the market will likely continue to show growth into 2011.
At the end of September, there were 1.29 million buy to let mortgages, an increase of 7% from the previous quarter.
The proportion of loans in arrears of more than 1.5% of the balance remains broadly unchanged at 1.45%, while repossessions (at 0.12%) and the appointment of receivers of rent (at 0.10%) were also virtually unchanged from the previous quarter.
CML director general Michael Coogan said:” We would expect buy to let demand to pick up further if current rising rental trends continue and house prices remain broadly stable. However, there is short-term uncertainty as a result of the unresolved debate on housing benefit and landlords’ response to new limits.
“The bigger question is whether there will be sufficient supply side capacity to meet that demand, as the number of buy to let lenders dwindled in the credit crunch after 2007 and is yet to be fully restored.
“However, it is clear that in a market where access to home-ownership has become more difficult, the private rental sector is experiencing, and will continue to benefit from, high levels of demand for good quality housing.”
CML members are banks, building societies and other lenders who lend around 94% of all residential mortgages in the UK.
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