Buy-to-let lending up 12% in third quarter

by Aaron Strutt

Nov 12 2010

Buy-to-let mortgage lending rose by 12% in the third quarter of this year, according to the latest figures from the Council of Mortgage Lenders (CML), supported by ongoing demand for rental property against a backdrop of a dysfunctional owner-occupier market.

There were 26,900 loans advanced in the third quarter, worth £2.8 billion.  This quarterly rise of 8% by volume and 12% by value is the second consecutive quarterly increase in lending.

CML director general Michael Coogan said: "We would expect buy-to-let demand to pick up further if the current rising rental trends continue and house prices remain broadly stable. However, there is short term uncertainly as a result of the unresolved debate on housing benefit and landlords' response to new limits.

"The bigger question is whether there will be sufficient supply side capacity to meet that demand, as the number of buy-to-let lenders dwindled in the credit crunch after 2007 and is yet to be fully restored."

There are now more lenders in the buy-to-let market and there are rumours that a very big bank will soon return to lending.  The lowest investment mortgages are now not that far away from some residential rates and there are a number of low arrangement fee options.

November 12, 2010