CML: Buy-to-Let market continued to grow in third quarter

Thursday, 10 November 2011 11:44 AM

The number of new buy-to-let loans increased by 16% in the third quarter of 2011, according to data published today by the Council of Mortgage Lenders. Over the same period, the value of mortgages advanced in the sector grew by 19%. The data shows that the pick-up in buy-to-let lending that began in the second quarter has continued.

In the three months to September, a total of 34,500 buy-to-let loans were advanced, an increase from 29,700 in the preceding quarter. The value of lending totalled £3.8 billion, up from £3.2 billion. On both measures, buy-to-let lending was at its highest level since the final quarter of 2008.

The number and value of outstanding buy-to-let loans also continued to grow. At the end of September, there were 1,378,700 loans outstanding, worth £157 billion, up from 1,296,700 (worth £150 billion) 12 months earlier.

In the third quarter, there were 18,580 loans for the purchase of buy-to-let properties, accounting for almost 12% of all house purchase loans. But the proportion remains significantly lower than the former peak in the first quarter of 2008, when 32,650 mortgages for buy-to-let property purchase accounted for 19% of all loans for house purchase.

Chart One: Buy-to-let house purchase lending
 

Source: CML research
In the third quarter, the number of buy-to-let mortgages more than three months in arrears declined from 28,300 (1.57% of the total) to 26,300 (1.45%). There was, however, a small increase in the number of buy-to-let properties taken into possession (from 1,500 in the second quarter to 1,600) although, as a proportion of all buy-to-let properties, the figure remained unchanged, at 0.08%.

Commenting on the latest data, CML director general Paul Smee said:

"With tenant demand remaining strong in the rental sector, some existing buy-to-let landlords have been expanding their portfolios and the growth that returned to the sector in the preceding quarter has continued. The recovery of buy-to-let from its low point in 2009 has helped improve supply and choice in the rental market. Despite recent improvements, however, buy-to-let lending volumes are still only around one-third of their former peaks."


DOCUMENTS ATTACHED

MM6 – Buy-to-let market summary
MM17 – Buy-to-let gross advances
AP5 – Buy-to-let arrears and possessions
AP7 – Comparison of arrears in the buy-to-let and wider mortgage markets
AP8 – Comparison of possessions in the buy-to-let and wider mortgage markets


NOTES TO EDITORS

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 94% of all residential mortgage lending in the UK. There are 11.2 million mortgages in the UK, with loans worth over £1.2 trillion.

2. Revisions arising from a refinement to our grossing procedure and a contributor re-submission have been made to our figures back to the beginning of 2009.

3. The CML buy-to-let press release for the fourth quarter of 2011 will be published on Thursday 9 February 2012.

4. This press release is also available on our website if you are unable to view the chart within the body of this email.


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