Buy to Let Mortgage Lending Shows Promise for the Market

09 June 2012 Categories: News

Buy to Let Mortgage Lending Shows Promise for the Market

Figures released by the Council of Mortgage Lenders (CML) last week have indicated a substantial growth in the buy to let market year-on-year. During the first quarter of 2012 over £3.7billion of lending was approved for buy to let purchases – an increase of 32% on the first quarter of 2011 when £2.8billion was approved.

These figures look very promising for buy to let investors however the director general of the CML, Paul Smee, has warned that growth could tail off over the coming 12 months. This warning comes again from the figures released by the CML which show that although the first quarter of 2012 was very positive in terms of overall lending, the number of buy to let mortgages being applied for and approved was actually down on the final quarter of 2011.

Mr Smee has attributed this minor slump, in part, to the surge in first time buyer mortgages that came with the end of the stamp duty holiday, but he also warns investors not to become overconfident in the market.

“Whether or not this is the start of a trend is too early to tell, but it is notable that the drop in buy to let purchase loans has been more pronounced this quarter,” said Mr Smee.