There was a second quarter rise in buy-to-let lending of 5%, the Council of Mortgage Lenders (CML) has reported.
In the three months to June, lenders advanced 33,200 loans, worth £3.9 billion, up from 32,300 mortgages, worth £3.7 billion in the first quarter of 2012.
Year-on-year, the volume of buy-to-let loans is up 14% (from 29,100) and the amount advanced up 18% (from £3.3 billion).
Growth in buy-to-let lending was evenly split between loans for house purchase and remortgaging, with both showing a 3% increase by volume over the first quarter. Year-on-year, lending for house purchase has grown more strongly (up 17% by volume and 21% by value) than remortgaging (up 10% by volume and 15% by value).
At the end of the second quarter, the number of outstanding loans totalled 1,416,000, worth £160.7 billion (up from 1,405,000, worth £159.4 billion at the end of the first quarter, and from 1,338,000, worth £153 billion a year earlier).
The average maximum loan-to-value available on buy-to-let mortgages remained at 75%, with average minimum rental cover at 125%. Both have been broadly unchanged for the last three years, the CML said.
In addition, there was a slight improvement in the performance of buy-to-let loans, with the proportion of borrowers more than three months in arrears declining from 1.69% at the end of the first quarter to 1.56% at the end of June (in the owner-occupied sector, the proportion was unchanged at
2.05%).
The proportion of buy-to-let properties taken into possession was unchanged at 0.12%, while in the owner-occupied sector the data showed a small decline (from 0.08% to 0.07%). It is not surprising, however, to see a lower rate in owner-occupied households, where there is a concerted effort to extend forbearance wherever possible.
CML director general Paul Smee said: “Buy-to-let is continuing to show signs of recovery, and growing broadly in line with expectations. The rental sector has grown strongly over the last decade or so, and buy-to-let continues to help deliver a wider choice for tenants.”
David Whittaker, managing director of Mortgages for Business, said: “If the Great British Olympic gold rush hasn’t been enough to warm the hearts of even the most pessimistic among us then these figures certainly should. Volumes are up, values are up and, even more encouragingly, arrears are down – a veritable podium of lending success.
“We expect this trend to continue into the traditionally busier autumn period which should set up the market well for the end of the year. While the market won’t be celebrating the smashing of any records, it won’t just be Britain’s athletes celebrating a golden 2012, there may well be a few satisfied buy-to-let landlords as well.”
