Buy to let borrowing not quite the booming market lenders would have landlords believe

Buy to let borrowing is not quite the booming market some lenders and industry commentators would have landlords believe, according to the latest official figures. Buy to let borrowing is up to the highest level since the end of 2008 for the three months ending September 30, says the Council of Mortgage Lenders (CML). However, the figures mask an underlying trend of landlords remortgaging rather than a surge in purchasing more homes to rent. The CML - the industry voice of the UK’s major banks and building societies - reports that the number of new buy to let loans was up 16% to 34,500 in the three months ending September 30. Around 15,920 of these loans were due to more landlords refinancing or switching mortgage lenders rather than any boom in buying new properties. Even the CML confirms the buy to let purchase market is running at around a third of the peak in 2007, when of loans were for buying property, while the current figure is running at 12% of total loans. In the quarter, landlords with buy-to-let mortgages more than three months in arrears dropped from 28,300 (1.57% of the total) to 26,300 (1.45%), while more properties were repossessed - from 1,500 in the second quarter to 1,600 in the third. CML director general Paul Smee said: "With tenant demand remaining strong in the rental sector, some existing buy-to-let landlords have been expanding their portfolios and the growth that returned to the sector in the preceding quarter has continued. “The recovery of buy-to-let from its low point in 2009 has helped improve supply and choice in the rental market. Despite recent improvements, however, buy-to-let lending volumes are still only around one-third of their former peaks."

Landlord blog

Siobhan Smith

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