Gross mortgage lending of £4.2 billion across 33,500 mortgages was advanced to buy-to-let landlords in the first quarter of 2013, according to latest survey data from the Council of Mortgage Lenders. This compares with £4.6 billion the previous quarter, and £3.7 billion in the first quarter of last year.
Nearly half of this lending was for remortgage, rather than house purchase. Nevertheless, the buy-to-let sector continued to grow, and loan performance improved.
By the end of March buy-to-let lending accounted for 13.4% of total outstanding mortgage lending in the UK – up from 13% the previous quarter and 12.9% at the end of the first quarter of 2012.
There are now around 1.46 million buy-to-let mortgages in the UK, accounting for around 13% of the total estimated stock of 11.26 million mortgages.
Of all mortgages in arrears of over three months, only 8.3% were buy-to-let (down from 9.0% the previous quarter and 10.5% in the first quarter of last year). The possession rate, at 0.11%, was higher in the buy-to-let sector than the 0.07% in the owner-occupied sector, but fell from its previous quarterly rate of 0.12%.
Commenting on the quarterly performance of the buy-to-let mortgage sector, CML director general Paul Smee said:
“The buy-to-let mortgage market is performing well, against a backdrop of robust landlord – and tenant – demand for good quality rental property. Loan performance compares favourably with the owner-occupier sector, and buy-to-let continues to grow as a proportion of the overall mortgage market.
“As the private rented sector looks likely to be the longer-term tenure in which more households may live in the future, lenders are actively looking at how they can best evolve their future lending for those landlords who may wish to offer longer-term tenancies to their tenants – although concrete landlord demand for such borrowing is not yet clear.”