Pick-up in buy-to-let loan sector

BUY-TO-LET lenders approved mortgages worth £3.5bn between April and July in the sector’s busiest quarter since the 2008 financial crisis.
By The Newsroom
Published 13th Aug 2011, 07:00 BST

There were 32,000 loans in the quarter, although the Council of Mortgage Lenders (CML) said its figures still showed the market is running at around one third of the level seen at the peak of lending in 2007.

Demand from buy-to-let investors has picked up in recent months as tight mortgage availability has caused the rental market to strengthen. However, the CML pointed out that remortgaging accounted for 65 per cent of the overall increase in buy-to-let lending in the quarter.

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At the end of the second quarter, there were 1.34 million buy-to-let mortgages worth £154.5bn, up from 1.26 million and £148.8bn at end of the same period in 2010.

The CML added that for the first time since 2008 the arrears rates for buy-to-let mortgages were lower than in the owner-occupied sector. At 28,100, or 2.09 per cent, of the total, loans over three months in arrears in the buy-to-let sector were 0.05 per cent lower than in mainstream lending during the quarter.

However, repossessions in buy-to-let increased by 9 per cent from 1,700 in the first quarter to 1,900 in the second.