Sharp rise in buy-to-let lending

The number of new buy-to-let loans increased by 16% in the third quarter of 2011, according to data from the Council of Mortgage Lenders (CML).

In the three months to September, 34,500 landlord loans were advanced, up from 29,700 in the preceding quarter. Over the period, the value of mortgages increased by 19% as the level of growth first seen in the sector in the summer continued.

Cases of arrears declined to 26,300 (Q2: 28,300) although the number of buy-to-let properties taken back by lenders rose to 1,600 (Q2: 1,500).

In Q3 there were 18,580 loans for buy-to-let property purchase, accounting for almost 12% of all house purchase loans but with the proportion well below its 2008 peak of 19%.

Total buy-to-let lending rose to £3.8 billion in the third quarter, up from £3.2 billion in the previous three months.

Commenting on the figures, CML director general, Paul Smee, says: “The recovery of buy-to-let from its low point in 2009 has helped improve supply and choice in the rental market.”

He adds: “Despite recent improvements, however, buy-to-let lending volumes are still only around one-third of their former peak.”

 

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