Buy-to-let lending increases
The latest figures from the Council of Mortgage Lenders show that the value of buy-to-let mortgages in the last quarter totalled £4.2 billion.
This is an increase of 8% from £3.9 billion in the previous quarter. The total number of loans advanced totalled 34,400, up from 33,600 in the previous quarter.
Stuart Law, Chief Executive of Assetz, said: “The buy to let sector is in rude health and we are seeing thousands of new investors register with us every month.
“The average loan to value of 75% available on buy to let mortgages is not a hindrance to investors as generally speaking they are looking for a safe place to put their cash that will produce a healthy and reliable return and mortgages are used tactically on modest loan to values to enhance long-term capital growth potential.”
Whilst the figures are encouraging, buy-to-let lending remains a smaller proportion of the overall market than in 2007.
The average maximum loan-to-value available on buy-to-let mortgages remained at 75%, with an average minimum rental cover of 125%.
Both measures have remained largely unchanged for more than three years.
Commenting on the data, CML director general Paul Smee said the buy-to-let lending figures were growing in line with expectations.
He said: “As well as continuing to fund owner-occupation, lenders are contributing to the expansion of a strongly growing rental sector, helping to deliver choice and mobility for tenants.”
David Whittaker, managing director of Mortgages for Business, commented: “Landlords are the big winners in the current market as the virtuous circle they’ve enjoyed over the last two years continues to turn.”
Mr Whittaker believes that the buy-to-let activity is likely to remain largely steady over the next year.