11-Nov-2009
There were two pieces of good news released today for landlords, or for
those planning to invest in a buy to let property in the near future.
Mortgage lending in the buy to let market grew last quarter for the
first time in two years, and the level of landlord possessions dropped
last quarter from the start of 2009.
The Council of Mortgage Lenders (CML) published data today showing that
current lending to landlords reached £2.1 billion in the last quarter,
a massive 10% higher than in the previous 3 months. This last quarter
also showed a significant increase in the number of buy to let mortgage
loans accepted, an increase of 2,100 home loans from the previous
quarter.
When looking at these figures, it's worth remembering that the buy to
let market peaked in 2007 at far higher levels of borrowing, and that
we are still a long way from seeing a full recovery. However,
considering the poor condition of the market over the past two years
and the difficulties that have been faced by landlords, the growth is
encouraging.
The CML's director general Michael Coogan said: "At this stage, the
recovery is modest - but the figures show that buy-to-let is here to
stay. Buy-to-let lenders are among those facing some of the biggest
challenges in raising mortgage funding, so the improved figures are all
the more welcome.
He continued, " With funding for social housing under pressure, the
private rented sector has a strong future. Mortgage lenders will have
an important role to play in it, and will continue to help improve
choice and standards for private tenants."
Reassuring too is the news that for the third quarter in a row, the
number of landlords in arrears on their mortgage payments has fallen.
The Ministry of Justice has released figures showing that the number
possessions of buy to let properties has fallen 3% from last quarter,
and a total of 9% from the same time last year.
The cost of buy to let mortgages has fallen, which is likely to have
contributed to the drop in missed mortgage payments. Although it is
still very difficult to find a remortgage without a deposit of at least
80% of your property value, landlords are finding that the standard
variable rates of their lenders are actually very competitive at the
moment, with the base rate still sitting at 0.5%.
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