Between January and March 33,500 mortgages were taken out, representing an increase of £500m on the same period in 2012.
Paul Smee, director general of the CML, said almost half of buy-to-let lending was for remortgages as opposed to house purchases. Lending in the sector accounted for 13.4 per cent of total outstanding mortgages, an increase of 13 per cent on the previous quarter and 12.9 per cent for the first quarter of 2012.
Mr Smee said: “The buy-to-let market is performing well against a backdrop of robust landlord and tenant demand for good quality rental property. Loan performance compares favourably with the owner-occupier sector, and buy-to-let continues to grow as a proportion of the overall mortgage market.
“As the private-rented sector looks likely to be the longer-term tenure in which more households may live in the future, lenders are looking at how they can best evolve their future lending for those landlords who may wish to offer longer-term tenancies to their tenants, although concrete landlord demand for such borrowing is not yet clear.”
| Repossessions |
The CML revealed that repossessions for all mortgages were 17 per cent lower year-on-year between January and March. Repossessions for the quarter numbered 8000, down from 9600 compared to the first quarter of 2012, while arrears remained stable at the equivalent of 1.4 per cent of all mortgages. Mr Smee said: “Arrears and repossessions have stabilised at levels lower than many anticipated when the economic downturn started. Low interest rates, continuing employment, lender forbearance and tactical public policy support have combined to ensure that repossession really is a last resort.” |
Adviser views
Brian Murphy, head of lending for national advisory firm the Mortgage Advice Bureau, said: “Poor savings rates have sparked interest in the buy-to-let market as investors look to capitalise on growing tenant demand and strong long-term returns.
“The increase in demand for privately-rented property reflects the growing appeal of flexible living arrangements far from being a second-best option.”
David Whittaker, managing director of Kent-based broker Mortgages for Business, said: “The economy may be firing blanks but the buy-to-let market is going great guns. High yields, stagnant property prices and improved financing options are encouraging investors to add to their portfolios.”
