CML news & views

More than 144,000 new buy-to-let loans were advanced in the first six months of this year, taking the number of outstanding mortgages held by landlords to more than 1.1 million.

At 144,600, the number of buy-to-let loans advanced in the first half of this year was lower than in both the preceding six months (176,500) and in the first six months of 2007 (169,500). 

As in the rest of the mortgage market, however, activity in the buy-to-let sector is being constrained by credit market conditions. A significant number of lenders offering loans to landlords rely on wholesale funding. 

Despite this, the decline in buy-to-let lending has been lower than in the wider market. The number of buy-to-let mortgages advanced in the first half of this year was 18% lower than the number for the first half of 2007. Over the same period, however, the number of house purchase and remortgage loans in the wider market declined by 28%.

There are now 1,103,000 buy-to-let mortgages outstanding, worth £132.5 billion.  Buy-to-let lending now accounts for 9% of the number of UK mortgages outstanding and 11% of the value of the mortgage stock.

Arrears in the buy-to-let sector remain lower than in the wider mortgage market, with 1.1% of buy-to-let loans more than three months in arrears, compared with 1.33% of all mortgages. The proportion of buy-to-let properties taken into possession is the same as in the wider market, at 0.16%. But that equates to around 1,800 properties out of a total of more than one million.

We expect the buy-to-let market to be underpinned by the continuing strength of demand for rental property. In part, this will be driven by people who would prefer to buy their home but who are being forced to carry on renting for now.