Demand for buy to let lending has dropped for the first time in two years, according to the latest Bank of England lending survey.
Specialist landlord lenders told the Bank that they expect the figures to be a blip and the market will quickly recover from the slight fall. Continue reading First drop in buy to let lending for two years
"The mortgage market has hit rock-bottom"
Property values are about to level out and then show a modest increase, says the Council of Mortgage Lenders (CML), which speaks for all Britain’s major mortgage lenders.
Mortgage availability is also ‘broadly stable’ and has remained at around the same levels for two years, adds the CML.
The housing market analysis is based on the latest economic figures released by the government and the Bank of England.
The CML backs a Treasury forecast that suggest house prices have bottomed out and will stabilise over the next 18 months or so before beginning to rise in line with wage inflation.
“Despite the weakness of consumer sentiment associated with ongoing pressure on household incomes and the uncertain economic outlook, there are no signs of significant house price falls,” said CML chief economist Bob Pannell.
“Values continue to be strongly underpinned by the limited volumes of new build and forced sales. While current survey data suggests that house prices nationally may be drifting modestly lower in nominal terms, the prevailing view among economists is for house prices to stabilise through 2012 and then revert to growth of four to five per cent per year from 2014 onwards.”
Meanwhile, research by the Intermediary Mortgage Lenders Association (IMLA), the trade body representing lenders that market products through brokers, has revealed 34 per cent of intermediaries believe standard mortgage business levels will improve during the fourth quarter of the year, with 26 per cent expecting business levels to increase between three per cent and seven per cent.
IMLA chairman John Heron said: “This positive attitude from intermediaries is a reflection of the general improvement seen recently in the mortgage market. The pickup is slow but market conditions are gradually improving, particularly in the buy-to-let and remortgage markets.”
"Buy to let is a changed market"
The case for investing in buy to let is moving into sharper perspective as financial firms with a vested interest in selling to landlords disclose their business insights into the sectors.
For landlords thinking about the future of the rental businesses and the prospects of expanding, it looks rosy.
The latest private rented sector statistics from the Communities and Local Government Department and estimates for the number of new homes needed to meet the demand of a growing population provide the hooks for everyone to hang their prediction hats on.
The CLG figures reveal 17.4% of homes are buy to lets, up from 16.4% in 2009. Around 3.1 million homes are rental properties – an increase of 229,000 since 2009. Continue reading Money Men Predict Surge in Buy to Let
"Paragon announces latest figures"
Buy to let mortgage specialist Paragon has announced completing new lending of £65.7 million for the second quarter of 2011.
The firm disclosed this is around two-thirds of buy to let completions by Paragon Mortgages since the firm reopened lending books on October 1st last year, after a lengthy absence from the market due to the credit crisis.
Some simple arithmetic to analyse the figures reveals how Paragon stands in the market as one of the most publicly vocal firms speaking out against the proposed European Union mortgage directive that could regulate buy to let lending in the UK.
The last whole-of-the-market buy to let lending figures are for the quarter ending March 31 this year from the Council of Mortgage Lenders (CML).
The CML collates lending figures from all the UK’s biggest bank and building society mortgage lenders – including Paragon.
The figures show that for the first quarter, CML buy to let lenders completed £2.9 billion of mortgages across 27,600 loans – at an average loan value of £105,000.
Taking the Paragon lending of £65.7 million and dividing by the CML average loan amount, the rough indication is Paragon advanced funds on around 638 properties in the second quarter.
If this is around two thirds of their completions, the firm has advanced loans on around 950 properties since October 2010.
John Heron, director of mortgages at the Paragon Group, said: “We had a strong focus on rebuilding our distribution network and brand awareness following our return to the market and it’s pleasing to see that approach start to deliver.
“The fact that two-thirds of completions came in the third quarter of our financial year alone shows our new lending is building strong momentum.”
The lender also confirmed negotiations are underway to release more funds for further lending.
