November saw the highest level of gross buy-to-let lending since the changes to stamp duty in April, according to the Council of Mortgage Lenders.
Steve Olejnik, chief operating officer of Mortgages for Business, said part of the buy-to-let lending boost will have been remortgage activity.
He said the increasing amount of lending will have been driven by growing landlord confidence, as investors continue to come to terms with the changes and factor them into their planning.
He said many investors will have also wanted to beat the Prudential Regulation Authority’s changes to buy-to-let affordability checks, which came into force on 1 January, as well as the changes to income tax relief on finance costs.
| Number of loans for house purchase and remortgage in November | |||||
| House purchase | Remortgage | ||||
| FTBs | Movers | Buy-to-let | Home owners | Buy-to-let | |
| Nov-15 | 27,900 | 32,800 | 10,000 | 30,600 | 13,100 |
| Oct-16 | 28,800 | 28,900 | 6,200 | 34,700 | 12,100 |
| Nov-16 | 30,100 | 30,700 | 6,700 | 34,700 | 14,000 |
| 1 month change | +4.5% | +6.2% | 8.10% | 0.0% | 15.70% |
| 12 month change | +7.9% | -6.40% | -33.00% | 13.40% | 6.90% |
Mr Olejnik said: “We predict that gross buy-to-let lending will dip by around 13 per cent in December, due to a seasonal slowdown, which will equate to about £2.8bn of lending for the month.
“This will put gross lending on track to reach the £40bn mark for 2016 – which is in line with our initial prediction for the year.
“We expect that 2017’s total will be slightly lower than 2016, but not by a significant amount.
“While the regulatory changes to property investment are challenging, the property market will continue to offer strong returns to those who take an intelligent and level-headed approach to their portfolios.
“Landlords need to factor the forthcoming tax changes into their financial planning, and should always consult with a professional tax adviser.”
The CML also reported home-owners borrowed £11bn for house purchase in November, up 5 per cent month-on-month and 2 per cent year-on-year.
They took out 60,800 loans, up 5 per cent on October and up 0.2 per cent on November 2015.
First-time buyers borrowed £4.7bn, up 4 per cent on October and 9 per cent on November last year. This equated to 30,100 loans, up 5 per cent month-on-month and 8 per cent year-on-year.
Remortgage activity totalled £5.8bn, down 5 per cent on October but up 14 per cent compared to a year ago. This came to 34,700 loans, unchanged month-on-month but up 13 per cent compared to a year ago.
emma.hughes@ft.com
