Buy to Let Mortgage lending Bucks downward trend of 2011

16 May 2012 Categories: News

Buy to Let Mortgage lending Bucks downward trend of 2011

According to the 2011 annual report compiled by the Council of Mortgage Lending (CML), the total amount lent to house buyers for the purchase of residential property during the twelve month period of 2011 was the lowest seen for 36 years. Figures from the report showed that 508,000 house purchase loans were approved during the year; nearly 30,000 less than in 2010 and the lowest total since 1974.

On the upside though, buy to let lending grew by nearly 40%, a fact that highlights the current strength of the private rental market. Buy to let lending was the only mortgage market to show growth with around £4billion more being advanced during 2011 than during 2010 (£14.1billion and £10.1billion respectively). The report also mentioned that around 124,000 buy to let mortgages were approved last year, which while encouraging is still far short of the £45billion lent during the peak of the buy to let market in 2007.

Chairman of the CML, Martijn van der Jeijden, commented that in his opinion buy to let mortgage lenders are still dubious about lending in areas where there is an increased possibility of encountering tenants claiming benefits. He said that should the Government make changes to the way in which LHA benefits are paid i.e. directly to the landlord rather than to the tenant, then buy to let lenders would become encouraged to lend more freely.