Buy-to-let mortgage lending at highest levels since 2008
Buy to let is booming. But is this another bubble?
Buy-to-let mortgage lending hit £5.1 billion in the second quarter of the year, the highest amount seen since the third quarter of 2008.
Annually this is a 19% boost in volume and a 31% higher value, data from the Council of Mortgage Lenders (CML) has revealed.
Buy-to-let lending
Buy-to-let lending has increased significantly during the past year and now accounts for 13.3% of outstanding lending the UK, compared to 13.1% in the first quarter and 12.9% in 2012.
Between April and June this year 40,000 buy-to-let mortgages were advanced, which were worth a total of more than £5 billion.
Half of these were for new purchases, which saw a rise of 15% in volume and 19% for value. For landlords remortgaging there was a bigger difference, with a 24% rise in volume and 29% hike in value.
The total number of buy-to-let mortgages in arrears was up slightly, to 8.4% from 8.3% in the first quarter. This is still below the annual figure which stood at 9.7% a year ago.
Future predictions
The current strong trend in the buy-to-let market is partly because of a still-growing demand for rented properties. This is combined with a fall in the price of mortgages, which means more people are being approved.
The drop in mortgage rates is largely due to the Government’s Funding for Lending (FLS) scheme which has given lenders cheap access to money.
First-time buyers in particular are benefiting from these changes. This spring saw the highest levels of lending to first-time buyers since the peak year of 2007.
The best buy-to-let mortgages
Buy-to-let mortgage rates have fallen this year and now some of the best offers lie around the 3% mark. Here are some of the cheapest rates around:
|
Lender |
Duration |
Rate |
Max LTV |
Fees |
|
Two years |
2.99% |
65% |
£1,999 |
|
|
Two years |
3.39% |
60% |
£995 |
|
|
Two years |
3.40% |
70% |
£999 |
|
|
Two years |
3.15% |
60% |
£2,594 |
|
|
Two years |
2.99% |
75% |
2.50% of the loan (max of £3,000) |
See the latest mortgage rates and get expert advice
This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated broker (such as one of our brokers here at Lovemoney), before acting on anything contained in this article.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
More on mortgages:
The best mortgages with no early repayment charges
Offset mortgages won't save you money
Seven reasons mortgage lenders turn you down
Buy-to-let mortgage change that means more security for tenants
What's wrong with an interest-only mortgage?
Let-to-buy mortgages: what you need to know
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