Buy to let mortgage market shows signs of growth

The buy to let mortgage market showed positive signs of growth during the last quarter according to the Council of Mortgage Lenders.

For the first time in two years gross lending in the buy to let mortgage market increased, data published by the CML shows today.

Buy to let lending increased by 10% compared to previous months and amounted to £2.1 billion of new mortgages. Gross lending is still significantly down on its peak in 2007, however.

Mortgages for house purchases accounted for more of the volume than remortgages within the buy to let market, which mirrors the situation in the mainstream property market. The CML attributes the weaker demand for remortgages to the inability of borrowers to take out remortgages with an LTV greater than 80%

The number of arrears in the buy to let market is also falling which is attributed to the low costs of borrowing prevailing in the market at present.

Michael Coogan, the CML’s director general, commented: “At this stage, the recovery is modest – but the figures show that buy-to-let is here to stay.”

“Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome.”

Mr Coogan also predicted a more promising outlook for the buy to let market by saying “At this stage, the recovery is modest – but the figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome.”