CML figures released this week show that buy-to-let lending has fallen by 5% in the first quarter of 2011 compared to quarter 4 of 2011. New buy-to-let lending totalled £3.7 billion, over 32,300 loans. This is a third better than the same time last year, but is still two thirds below 2007 levels.
The buy-to-let sector is continuing to increase its share of the mortgage market. Buy-to-let mortgages represent an estimated 12.8% of the value of outstanding mortgages, up from 12.6% at the end of 2011. The total number of buy-to-let mortgages is 1.4 million, with a value of £159.4 billion.
The average maximum LTV available on buy-to-let mortgages remained at 75%, with the average minimum rental cover 125%. This is broadly the same as for the last three years.
The number of buy-to-let mortgages in arrears fell slightly, with 1.7% in arrears of more than three months. The repossession rate was 0.12%, which is broadly the same as for the last year. It is higher than the owner-occupoed sector where 0.08% of properties are repossessed.
Stuart Law, Chief Executive of Assetz, commented:
“We saw a modest shift towards buyers using cash rather than mortgages to fund buy to let investments in the first quarter of 2012, perhaps due to a mild slowdown in lending given the Basel III capital restrictions. Nonetheless, the 32% growth year-on-year for new buy to let lending mimics our own experience in the market with a growing appetite for property from investors.
“It is encouraging that buy to let mortgage arrears continue to fall, and given the relative security of the sector versus the home mortgage market it is unsurprising that buy to let lending is taking on a greater share of the market.”
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