Gross lending in the buy-to-let mortgage market grew in Q3 for the first time in two years, according to CML figures.
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Mortgage Solutions / IFAOnline.co.uk – 12 Nov 2009

At £2.1bn, lending was 10% higher than in the previous three months. Q3 2009 also saw the first increase in two years in the number of buy-to-let loans advanced, from 21,600 to 23,700.
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However, the CML stated the recovery in buy-to-let lending was from a low base, with current lending volumes sharply lower than their peak in 2007.

The number of outstanding buy-to-let loans grew to 1,205,000, representing 11% of all mortgages by the end of the quarter, compared to 1,180,000 three months earlier. The value of outstanding buy-to-let mortgages increased by 2.5% to £144.2bn.

Within the buy-to-let market, both lending for house purchase and remortgaging grew in the last three months.

As with the mainstream mortgage market, however, house purchase lending was stronger. Remortgaging capacity was constrained by the unavailability during the quarter of any buy-to-let mortgages at over 80% LTV.

Landlords with existing mortgages at a higher LTV are therefore effectively obliged to stay on their existing lenders’ reversion rates.

Low borrowing costs also contributed to a continued improvement in cases of buy-to-let arrears and an improvement in the number of landlords facing enforcement action.

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