Mortgages  

‘Record’ number of buy-to-let deals in Q1

‘Record’ number of buy-to-let deals in Q1

There were a record number of buy-to-let mortgage deals on the market in the first quarter of this year, supporting data that buy-to-let continues to be the main success story across market segments.

In the first three months of 2015 there was an average of 839 buy-to-let deals from 31 active lenders on the market, according to Mortgages for Business.

The broker said the number of buy-to-let deals available in the first few months of 2015 was up by 21 products on the previous quarter.

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This quarter has seen the launch of Foundation Home Loans and State Bank of India and products from these two lenders account for all of the increase in product numbers in the quarter.

While the rate of growth in the number of buy-to-let products available has slowed, and indeed withdrawals of products frequently lead to short term drops in the numbers, “there is no doubt that the trend is still upwards”, the broker said.

The broker pointed out it is notable however that the fastest growing segments are the five-year fixed rate mortgage and the life of loan term tracker.

In Q1 2015, 22 per cent of buy-to-let products were five-year deals, up from 18 per cent in the previous quarter, and 10 per cent were loan-term products, up from 9 per cent in Q4 2014.

Last week, the Bank of England revealed that buy-to-let lending represented 13 per cent of total gross mortgage lending in 2014, with gross advances having recovered from its post-crisis trough though still below its 2007 peak.

Buy-to-let mortgages accounted for 15 per cent of the total outstanding value of UK-resident mortgages at the end of the fourth quarter last year, with another trend identified being that the number of advertised BTL mortgage products at loan-to-value ratios of 75 per cent and above having risen since mid-2013, although most are still below 80 per cent loan-to-value.

At the time, Jonathan Harris, director of mortgage broker Anderson Harris, said that buy-to-let is the real lending success story, seeing a huge improvement in terms of deals available, rates and relaxing of criteria since the downturn.

Data published by the Council of Mortgage Lenders earlier this month showed that but-to-let was the only segment in the market that saw an increase in annual lending and lending values.

emma.hughes@ft.com

Additional reporting by Donia O’Loughlin