Headline figures for buy to let borrowing show massive increases in loans to landlords during the past year.
The number of loans soared by 56% year-on-year, while the amount of cash borrowed increased by 69%, according to the Council of Mortgage Lenders, the trade body representing most of the country?s buy to let lenders.
In numbers, buy to let lenders advance £2.2 billion to 16,200 borrowers in March 2014.
In the first three months of the year, the number of loans nudged up 1% to 47,000, compared to the last quarter of 2013 and 46% compared to the first quarter of 2013.
The loans were roughly evenly split between new purchases and remortgages.
According to brokers, more buy to let lenders are in the market offering a record number of deals.
However, many of these ‘different’ deals are variations on a theme, like a two year fixed buy to let mortgage at different loan-to-values.
Also, despite lenders and the CML crowing about how much they are lending, landlord loan levels are still way below the peak of the market before the credit crisis.
According to the CML, buy to let mortgage lending peaked in the third quarter of 2007, with just under 50,000 loans advanced ‘ so despite the headline figures, the market is picking up but still running at around two-thirds below peak levels.
At the end of 2007, the market comprised 1,026,000 buy to let loans worth a total of £121 billion. During the year, 346,000 landlords borrowed money for buy to lets worth £45.7 billion, says the CML.
In comparison, 1,557,000 million buy to let loans were outstanding at the end of 2013, worth £177 billion.
The figures show that in six years, the buy to let mortgage market has grown by 531,000 loans valued at £56 billion ‘ an increase that is not valued at much more than the entire buy to let market activity in 2007.
CML director general Paul Smee said: ‘All types of lending show positive year-on-year growth but the rate of increase is not as frenetic as at the end of 2013. Buy-to-let lending continues to recover and regain market share.?
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Article courtesy of LandlordZONE
