Buy to let mortgage lending increases again

Landlord Expert
By Landlord Expert February 28, 2010 17:20

A total of £2.4 billion 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 £4 billion that was lent during the same period of 2008.

The group added that the growth seen during the past six months was also from a very low base, after the market contracted for seven consecutive quarters up to the end of June last year.

Just 93,500 mortgages were advanced during the whole of 2009, less than half 2008's figure and well down on the 346,000 loans advanced in 2007.

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

Landlord Expert
By Landlord Expert February 28, 2010 17:20


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