Buy-to-let loans surge to 5-year high in fresh boom

Kasmira Jefford
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LENDING to buy-to-let landlords has soared to its highest level in nearly five years thanks to strong tenant demand and increased mortgage availability.

Lenders advanced 40,000 mortgages worth £5.1bn in the three months to the end of June, up 21 per cent in value on the previous quarter and the highest since 2008, according to data from the Council Of Mortgage Lenders (CML).

Year-on-year, buy-to-let lending was 19 per cent higher by volume and 31 per cent higher by value, although lending to landlords still remains low.

The CML’s head of policy Jackie Bennett said growth was helped by improved conditions in funding markets.

The government’s Funding for Lending Scheme has helped lower the cost of loans for landlords.

Meanwhile separate data from CML showed fewer Britons saw their homes repossessed in the second quarter of the year as low interest rates helped ease the burden on struggling owners.

There were 7,700 repossessions in the second quarter, almost four per cent lower than the 8,000 recorded in the first three months of the year, and equivalent to 0.07 per cent of all outstanding mortgages.

Lenders seized a total of 15,700 homes in the first six months of the year – the lowest number since the financial crisis hit the housing market in 2007.

The number of mortgages in arrears also dropped. At the end of June, a total of 157,700 mortgages (equivalent to 1.4 per cent of all loans) were in arrears of 2.5 per cent or more of the balance, down from 159,700 at the end of March.

This was the lowest number since the end of the third quarter in 2008.

“Borrowers are continuing to prioritise mortgage payments while lenders are showing forbearance where it is viable,” said Bennett.