CML and bridging lender tackle the big BTL issue

CML and bridging lender tackle the big BTL issue


With the news that the number of properties being bought with buy-to-let mortgages increased by around 84,000 in 2011, Jonathan Samuels, CEO of Dragonfly Property Finance, has given his views on the latest Council of Mortgage Lenders’ data.

Jonathan Samuels, CEO of Dragonfly Property Finance, said:

 “Buy-to-let is nowhere near the giddy heights of 2007 but these latest figures confirm that it’s on its way back. The buy-to-let sector is one of the few beneficiaries of the current economic climate.

"Buy-to-let is being driven by the weakness of the economy and the continued caution of high street lenders at higher LTVs.


“Consumers are wary about buying and lenders are wary about lending. The result is soaring demand for rental property, which is pushing yields ever higher.


"Landlords are making hay while the sun shines, adding to their portfolios in order to increase their exposure. The fact that property prices are low is contributing to this trend.  Landlords can buy low and rent high, which is manna from heaven."

First-time buyers are renting for longer as they are still finding it very hard to get onto the property ladder and with high costs of living and high street banks still cautious about lending at high LTVs it is a precarious position for these aspiring homeowners.

Nick Hopkinson, Director of property company, PPR Estates, believes: “Landlords themselves are increasingly excited about the high rent yields available in the current buyers’ market and most are seeking to grow their portfolios this year if they have money to invest.”

The recent CML buy-to-let data also showed that during the fourth quarter of 2011, a total of 34,800 buy-to-let mortgages (of which 15,600 were remortgages) were advanced, with a total value of £4 billion. This was virtually identical to the volume of business in the third quarter (34,300 loans worth £4 billion) but up on the fourth quarter of 2010 (26,300 loans worth £2.9 billion).

Compared with the height of the market in the third quarter of 2007, when quarterly lending totalled over 93,000 loans worth £12.7 billion, the buy-to-let market continues to operate at relatively subdued levels, but it is clearly continuing to recover from its low point in 2009.

Buy-to-let mortgages account for nearly 13 per cent of the total outstanding value of mortgages in the UK, and buy-to-let lending represented nearly 11 per cent of total gross mortgage lending in the fourth quarter of 2011.

Commenting on the latest data, CML Director General Paul Smee said: "Buy-to-let lending continues to perform well. Demand for rented property remains high, so the rationale for buy-to-let remains strong and there is little reason to foresee any change to this positive outlook for the sector.”

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