CML: Buy-to-let market returned to growth in the second quarter of the year

Thursday, 11 August 2011 11:43 AM

BUY-TO-LET MARKET RETURNED TO GROWTH IN THE SECOND QUARTER OF THE YEAR

The value of new buy-to-let loans increased by 21% in the second quarter of 2011, driven mainly by remortgaging, according to new data released today from the Council of Mortgage Lenders.

There were 32,000 buy-to-let loans, worth £3.5 billion, taken out from April to June, the highest number and value since the last quarter of 2008.

Remortgaging accounted for 65% of the overall increase in buy-to-let lending in the quarter. The value of the 15,230 loans for remortgage, at £1.6 billion, was 27% higher than in the first quarter and accounted for 53% of the total gross buy-to-let lending - up from 51% in the first quarter.

The number and value of outstanding buy-to-let mortgages continued to grow. At the end of the second quarter, 1.34 million buy-to-let mortgages, worth £154.5 billion, were outstanding, up from 1.26 million, worth £148.8 billion at the end of the same period in 2010.

Although this quarter's increase is significant, the market is currently running at around one third of the levels seen at the peak of lending in 2007.

For the first time since 2008, arrears rates for buy-to-let mortgages are lower than in the owner-occupied sector. In the second quarter, all buy-to-let cases where loans were over three months in arrears (including those under control of a receiver of rent) were, at 28,100 or 2.09% of the total, 0.05 percentage points lower than in the owner-occupied sector. Repossessions in the buy-to-let sector increased by 9% from 1,700 in the first quarter, to 1,900 in the second.

CML director general Paul Smee commented:

"If you consider the buy-to-let recovery alongside the increase in first-time buyer numbers we published yesterday, it appears that first-time buyers are not being displaced by buy-to-let landlords but are holding their own in a restricted market. So, this is encouraging news for those who want to rent, as long as it is realised that much of the current increase is for remortgage rather than house purchase.”

CONTACT CML FOR ANY OF THE FOLLOWING DOCUMENTS: 

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 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.

2. The CML buy-to-let press release for the third quarter of 2011 will be published on Thursday 10 November 2011.

CONTACT
Jayne Chichester - 020 7438 8922
Bernard Clarke - 020 7438 8923
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Jayne Chichester - 07983 388764
Bernard Clarke - 07983 388672

CML PRESS OFFICE
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