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.