A truer picture of buy to let lending has emerged with the latest official figures for borrowing released by banks and building societies through trade body the Council of Mortgage Lenders.
The CML reveals a ’marginal increase’ from the previous month of 14,600 loans – which include purchase and remortgage deals.
This figure sits at odds with landlord surveys talking up the buy to let sector suggesting between 15% and 25% of landlords had purchased new properties in the last quarter, unless they were cash purchases.
HM Revenue & Customs has just released figures that set the estimated number of private landlords in the UK at 1.4 million.
The CML says 43,900 buy to let mortgages were advanced in the quarter.
Even if every buy to let loan in September was to a separate borrower, the proportion of landlords seeking finance is just 3% of the total and far away from the stats bandied about by other surveys.
The CML figures also report 22,790 (51%) of these loans were for new buy to let purchases – so the rest were remortgages, which further undermines the other research.
Landlord mortgage arrears are lower than in the home-owner market, says the CML.
Buy to let borrowing accounts for more than 13% of the total number of mortgages, but only 9% of the mortgages in arrears.
The buy to let repossession rate is a little higher than on home-owner mortgages at 0.10% on buy-to-let compared with 0.06% on home-owner-mortgages. Of the 7,200 total repossessions, 1,500 were buy-to-let.
CML director general Paul Smee said: “The continued reduction in payment difficulties is obviously very welcome. Anyone who does face the prospect of difficulty can be reassured that repossession really is a last resort.
“By talking to their lender as soon as possible, most can resolve their temporary problems, without the lender resorting to repossession. It also makes sense for people to think ahead now to how they will manage their finances to cope with higher interest rates, and higher mortgage payments, as and when rates rise in the future.”