The number of buy to let mortgages taken out in the second quarter of 2010 was a 13% increase on figures for the previous quarter. Despite a still-subdued market, the number of buy to let mortgages agreed for Q2 2010 was 24,900, with a value of £2.4 billion, of which £1 billion was remortgaging.
Buy to let mortgages accounted for 12% of all mortgages, the highest proportion since records began. As at the end of June, there were 1.26 million buy to let mortgages outstanding, worth a total of £149 billion. In comparison, 22,000 buy to let mortgages were agreed in the previous quarter, and 21,600 in Q2 2009. Although business is only just over 25% of its level of three years ago, both the number and the value of buy to let loans were at their highest level since the fourth quarter of 2008. Levels peaked in the fourth quarter of 2009 but demand was artificially inflated by the end of the stamp duty concession.
CML director general Michael Coogan, commenting on the performance of the buy to let market, said: "The buy to let market has continued to grow, albeit slowly, throughout the period since the credit crunch. And with fewer people able to afford the entry costs to home-ownership, as well as the pressure on social housing, tenant demand for private rented property will remain strong. Finance for private landlords, whether institutional or individual, is crucial if the UK is to have enough homes to meet the needs of the population. Funding conditions for lenders remain tight, but there is every reason to expect the buy to let sector to continue to make a powerful contribution to helping meet the country’s varied housing needs."
Repossession rates remain higher than in the owner/occupier market although this may be accounted for by the higher forbearance levels which must be shown to owner/occupiers under new rules.