Buy-to-let lending on the rise

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Buy-to-let lending on the rise

Tue 26th Feb 2008

A new report from the Council of Mortgage Lenders (CML) has revealed that 179,100 loans were taken out by buy-to-let landlords in the second half of 2007, up from 171,800 in the earlier part of the year and 177,200 at the end of 2006.

That brought the total number of buy-to-let mortgages to 1,038,000 at the end of last year, up almost five per cent on 2006.

Arrears continue to be lower than in the broader mortgage market, with 0.73 per cent of buy-to-let loans in arrears of more than three months at the end of 2007, compared to 1.1 per cent in the wider mortgage market.

Lenders had, on average, an 85 per cent maximum on the percentage value of the property that they were willing to advance at the end of last year, combined with a required rental income that amounts to 120 per cent of the mortgage payment.

Michael Coogan, CML director general, said that the buy-to-let market "has remained resilient in the face of the funding constraints that have affected the sector and the wider mortgage market".

Despite current uncertainties over the future of the UK housing market, Alliance and Leicester recently reported that buy-to-let brokers believe 33 per cent of investor landlords could make an operating profit this year, as could 43 per cent of professional landlords.

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