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Buy to let grows for second consecutive quarter

16/02/2010 11:56:00
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image Lending in the buy to let sector has improved again

Buy to let lending grew for the second consecutive quarter during the final three months of 2009 as the market continued to show signs of improving, new figures show...

BUY-TO-LET lending grew for the second consecutive quarter during the final three months of 2009 as the market continued to show signs of improving, new figures show.

A total of £2.4billion was advanced to investment landlords during the three months to the end of December, 14% more than during the previous quarter, according to the Council of Mortgage Lenders (CML).

But the figure was still well down on the £4billion lent during the same period in 2008.

The group added that the growth seen over the past six months was also from a very low base, after the market fell for seven consecutive quarters up to the end of June last year. Just 93,500 mortgages were advanced during 2009, less than half 2008’s figure and well down on the 346,000 loans in 2007.

There was also a steep drop in the total value of lending, which at just £8.5billion was dwarfed by the £27.2billion and £44.6billion lent in 2008 and 2007 respectively.

The buy-to-let sector has been hit hard by the credit crunch, with many lenders withdrawing from the market altogether, while others have struggled to raise the funding they need for mortgages.

The steep fall in advances to investment landlords has caused buy-to-let lending to contract to account for just 5.9% of all mortgage advances during 2009, after representing 12.3% of the mortgage market in 2007.

CML director-general Michael Coogan said: “The figures show that the buy-to-let market continued to improve, albeit slowly, throughout 2009, and we are encouraged by this recovery.

“The new business market remains well below previous levels though, and below the level of activity which is needed to enhance a vibrant private rental sector in the UK.

“We are concerned that future, wrongly directed, regulation may actually prevent buy-to-let playing its vital role in providing good quality homes and wider housing choices.”


 

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