Buy-to-let lending figures show huge rise
Buy-to-let mortgage advances in the January-to-March period reached £6.8 billion, up 65 per cent from £4.1 billion the year before, according to Bank of England data.
The figures also show buy-to-let lending accounted for 14 per cent of all mortgage advances in Q1 2014, up from 12 per cent the year before.
Re-mortgaging loans – some undertaken to fund buy-to-let investments – totalled £12.9 billion in the first quarter, a 29 per cent rise on Q1 2013. The re-mortgaging total represents 27 per cent of all mortgages issued in January to March.
Later this month the Council of Mortgage Lenders issues its latest figures; some analysts expect them to show that the buy to let mortgage market is on track to hit at least £25 billion over the full calendar year of 2014 – that is a 20 per cent increase on 2013.
Jon Barker, Manager of Fenn Wright’s Residential Lettings team in Chelmsford adds: “With evident growth in the residential market, investors are definitely looking for opportunities to grow their portfolio or enter into the buy-to-let sector for the first time.
“In my opinion, they are taking the view that house prices have stabilised over the last 2 years and are on the up. Investors always want to buy the right rental property at the lowest possible price and there may be concern that to ‘watch and wait’ will result in missed opportunities. If the market moves on and purchase prices increase more then investors will achieve less attractive profit margins from their rental yields on any new purchases.”
Fenn Wright provides property management and lettings services from its offices in Chelmsford, Witham, Colchester, Stanway, Manningtree and Ipswich. You can find out more about the tailor-made packages for landlords.