|
 |
 |
|
|
Buy to let lending and yields boost for landlords By Simon Thompson |
|
|
|
|
|
|
|
Buy to let borrowing has picked up during the past year - but lenders are still keeping a lid on loans to landlords.
Lending was up 5% in the second quarter of 2012, according to the Council of Mortgage Lenders (CML) , the trade body for Britain’s leading banks and building societies.
In the three months to June, 33,200 loans worth £3.9 billion were advanced - up from 32,300 mortgages, worth £3.7 billion in the first three months of the year.
Over the year, the number of loans was up 14% from 29,100 and cash advanced increased 18% from £3.3 billion
However, lending is running at about a third of the peak of the market in 2006-2007.
The CML explained lending to buy and remortgaging was growing at roughly the same pace - both up 3% in the quarter, although loans to buy were stronger over the year.
At the end of the second quarter, lenders had a bank of 1,416,000 buy to let mortgages worth £160.7 billion, up from 1,405,000, worth £159.4 billion at the end of the first quarter, and from 1,338,000, worth £153 billion a year earlier.
The average maximum buy to let loan-to-value is 75% with average minimum rental cover of 125%.
The number of landlords more than three months in arrears fell from 23,744 (1.69%) at the end of the first quarter to 22,089 (1.56%) at the end of June, compared with a rate of 2.05% for owner-occupiers.
Around 3,400 buy-to-lets were repossessed this year - running at 0.12% for both quarters.
CML director general Paul Smee said: "Buy-to-let is continuing to show signs of recovery, and growing broadly in line with expectations. The rental sector has grown strongly over the last decade or so, and buy-to-let continues to help deliver a wider choice for tenants."
Meanwhile, buy to let yields have edged up for landlords, mainly on the back of rising rents, according to one of the largest property investment lenders.
Average gross rental yields hit 6.2% in June, compared to 6.0% the year before, says BM Solutions.
The increase is credited to a 5.3% growth in average rents during the year, from £697 a month in June 2011 to £734 a month in June 2012. The highest rents are in London, with tenants paying £1,287 per month - a 75% premium on the national average.
|
|
|
|
 |
|
|
|
View more
|
|
Are you an existing landlord?
Click here to log into your account
|
Are you new to AFS, click here to find out more information
|
|
|  |
|