Buy-to-let continued to grow in third quarter

Council of Mortgage Lenders

Image: Council of Mortgage Lenders Data

There was an increase of 8% in the value of buy-to-let mortgages taken out in the third quarter of 2012. The total taken out was £4.2 billion, an  increase on the £3.9 billion advanced in the preceding three months, according to data published today by the Council of Mortgage Lenders.

This data shows that the value of buy-to-let lending in the first nine months of 2012 amounted to £11.8 billion, a 19% increase on the £9.9 billion that was advanced over the first 9 months of last year. While this is encouraging news for the Private Rented Sector (PRS) it still means that buy-to-let lending is likely to total just a fraction over one-third of what it was during the peak period in 2007.

Both the average maximum loan-to-value available on buy-to-let mortgages (75%) and the average minimum rental cover (125%) have remained largely unchanged over the last three years.

Even with these encouraging increases buy-to-let lending continues to remain lower than in 2007 and 2008. Despite the fluctuating fortunes of the mortgage market in the last few years, the market shares of three distinct groups of borrowers – buy-to-let investors, home movers and first-time buyers – have remained broadly stable.

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