Buy to let lending sees year-on-year boost
Date online: 17/03/2015
As previously reported, gross mortgage lending reached £14.8 billion in January. This represents an 11% decrease from December’s gross lending total and is 8% lower than lending in January 2014.
However, the number of buy-to-let loans for house purchase was 7,600 in January, down 10% on December and 6% on January 2014. These loans represented a value of £1bn, a decrease of 7% month-on-month but up 5% year-on-year compared to January 2014.
The number of buy-to-let loans remortgages rose 21% in January from December to 10,400, an increase of 28% on January 2014. The value of these loans totalled £1.5bn, up 11% month-on-month and 29% compared with last January.
Paul Smee, director general of the CML, commented:
"The traditional beginning of year seasonal lull in lending is slightly more prominent in house purchase lending than in previous years, especially in comparison to the particularly strong levels at the start of 2014. Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months.
"Increases month-on-month in remortgaging, both for home owners and in the buy-to-let market, are welcome given the recent static nature of remortgage activity. Interest rates are looking unlikely to go up in the very near future and the greater availability of good mortgage rates has probably motivated people to look at a change."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
"Buy-to-let continues to go from strength to strength and interest in the sector is set to continue when pension rules are relaxed next month. A combination of cheap mortgage rates, easing criteria, plenty of demand from tenants and poor savings rates, are convincing many that investment property is the sensible home for their money."