The Council of Mortgage Lenders has published figures showing the resilience of the buy to let mortgage market.
In the three months to June 2012 borrowers took out 33,200 loans worth £3.9 billion- an increase of 5%. Year on year the buy to let market saw strong growth with the volume of loans up 14%. As well as borrowing money to buy property landlords are also re-mortgaging their existing loans. Year on year lending for house purchases by landlords has grown strongly- up 17% in volume and 21% by value. Remortgages were up 10% by volume and 15% by value.
The CML saay that the maximum loan to value available on buy to let mortgages was 75% with average rental cover of 125%. Our landlord insurance clients are certainly keeping us busy with new properties for us to cover. The housing sales market is still weak in many areas of the country so landlords seem to have been on the lookout for bargains. They must be hoping they have got their timing right and will enjoy high demand from potential tenants with property values not deteriorating further. Only time will tell.
CML director general Paul Smee said “Buy to let is continuing to show signs of recovery and growing broadly in line with expectations”.
It is worth remembering that buy to let lending is still way below the 2007 peak. Lenders are coming back to the market but there is nothing like the frenzied activity that we saw a few years ago.