|
|
|
Record Growth In Buy-To-Let Borrowing |
| Friday, 17th February 2006 |
Buy-to-let lenders advanced a record 130,400 loans in the second half of last year, says the Council of Mortgage Lenders.. |
The strong showing in the second half of the year amounted to a 40 per cent increase over the preceding six months, when 93,400 loans were issued, says the report.
The value of lending in the second half of 2005, £14.6 billion, was also a new record and was 47 per cent higher than the £9.9 billion lent in the first six months of the year.
The figures show that both loans for house purchase and remortgaging made a significant contribution to the growth of new buy-to-let lending in the second half of last year.
Looser Lending Criteria
There was also a slight softening of lending criteria during the period. The average maximum loan-to-value ratio for buy-to-let lending was 85 per cent (80 per cent in the first six months).
There was also a softening in expectations of minimum rental cover. Lenders expected monthly rental income to exceed mortgage payments by at least 25 per cent (30 per cent in the first half);
Commenting on the data, the CML's director general Michael Coogan said: "There was a notable pick-up in the buy-to-let sector in the second half of last year, so that lending in 2005 modestly exceeded the year before.
"In the wider mortgage market, we saw an 18% fall in the number of loans for house purchase last year, so the strong buy-to-let data may partly reflect increased demand for rental property.
Growing Market
Lending in the second half of the year increased the number of outstanding buy-to-let mortgages to 701,900, worth a total of £73.4 billion (eight per cent of the total market at the end of 2005).
This was 33.4 per cent higher than the 526,300 number recorded at the end of 2004. In 2005, the size of the outstanding buy-to-let market grew 11 per cent by volume and 16 per cent by value between the first and second halves of the year.
|
|
|
|
| |
