CML: June sees a strong month for buy-to-let
Date online: 11/08/2015
First-time buyers saw a large month-on-month increase in activity compared to May, but little change when compared to June 2014. Home mover lending also saw substantial monthly increases and slight yearly increases in volume and value. Home-owner remortgage activity increased by over a third month-on-month and year-on-year.
Buy-to-let continues to grow year-on-year and month-on-month, mainly driven by buy-to-let remortgage activity.
Buy-to-let lending for house purchase has performed more strongly than the home-owner loans for house purchase for most of the year, which in part is due to buy-to-let lending declining more than home-owner loans during the downturn. It currently accounts for 17% of gross lending in June.
Overall, buy-to-let lending rose sharply in June, increasing both month-on-month and year-on-year. While buy-to-let house purchase rose significantly, these increases are driven more by strong buy-to-let remortgage activity. A similar trend was seen in the second quarter as a whole, although the increases in volume and value were more muted.
Paul Smee, director general of the CML, commented:
"Notable this month is the uptick in remortgage activity among home-owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates. It is likely that people are now beginning to feel a rate rise is a realistic prospect, and not just a distant theoretical possibility.
"After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts."