Buy-to-Let Figures Soar

By November 17, 2010House Repossession

Remember my last post Time to go to Auction? Well, it seems my views have been validated. In the three months to September 2010, there was a 33% rise in borrowing by investment landlords. The actual amount borrowed by this sector was £2.8 billion, this compares with a lowly £1.9 billion for the same period in 2009.

Despite the improvements, lending levels for investment landlords are a drop in the ocean compared to the market’s zenith in 2006 and 2007, when lending was an astounding £12.4 billion for the third quarter of both years – we have a way to go yet. And there lies the opportunity.

Michael Coogan, director general of CML (Council of Mortgage Lenders), wonders “whether there will be sufficient supply side capacity to meet … demand, as the number of buy-to-let lenders dwindled in the credit crunch after 2007 and is yet to be fully restored.” If that’s not a call to arms, I don’t know what is. The CML expect the buy-to-let demand to pick up further, based on rising rental trends and broadly stagnant house prices.

Currently there are around 309 buy-to-let type mortgages available, quite an increase on the 185 products that were on offer at this time last year; proof, if any were needed, that the lenders have realised that demand is strong. However, in July 2007 there were 3,648 products available.

There another positive note too – CML statistics show that there were 1,500 properties repossessed from landlords in the third quarter of this year, 100 fewer than in the previous quarter. Although that still seems like a high figure, when you realise that it’s just 0.12% of all buy-to-let mortgages, it doesn’t seem so dire after all.