Council of Mortgage Lenders says buy-to-let mortgages at highest level since 2007

Council of Mortgage Lenders says buy-to-let mortgages at highest level since 2007

Clock  2 minute read

Carl Shave Carl Shave | November 26, 2015


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A recent report from the Council of Mortgage Lenders has suggested that lending to landlords peaked in the summer with 33,600 loans taken out for property purchase. This figure represented the busiest quarter (from July to September) in more than seven years. The reasons for such a significant figure appear to be related to disappointing returns on savings accounts, which in tandem with rising prices and rents, have made property a much more appealing investment for savers. A recent survey by the Office for National Statistics showed that 44% of people thought that property offered the best return on their cash. During the recent economic downturn, buy-to-let lending declined dramatically, more so than lending to homeowners, as investment in property appeared to be a risky investment for both individuals and lenders. Whilst loans to homeowners declined by 50% in volume from 2007 to 2009, buy-to-let loans for house purchase declined by 71% in the same period, the report from the CML suggested. Conversely, the 11,300 buy-to-let loans in September 2015 alone were worth a combined £1.5bn, which reflects an increase of more than a third from September 2014.

The Expert’s View

The buy to let market has been a sector of the industry that has seen significant growth over the last few years. Potential investors and lenders alike have seen the possible potential in this area, and with the latter wanting to see growth in this sector, some have relaxed criteria such as minimum incomes and minimum deposit sizes. The ongoing potential growth in the housing market together with good rental yields when compared to typical returns from savings looks to ensure this sector of the market will continue. The recent changes in the Chancellors Autumn Statement regarding stamp duty for buy to let purchases could see some potential investors rethink their plans but, it is perhaps unlikely to deter the serious buyer who will continue to see the potential returns a rental property could provide. If you would like to discuss buy to let mortgages with the Just Mortgage Brokers team, get in touch today. You can call us on 0800 114 3996, or use our contact form.