Remortgages drive up BTL lending in 2013
Figures recently released by the Council of Mortgage Lenders (CML) show that buy to let lending accounted for 11.5% of total lending in 2012.
136,900 buy to let mortgages were completed, roughly half of which were remortgages. This amounted to £14.6billion worth of buy to let lending in total – 19% higher than in 2011, and the highest level in four years.
The highest share of the market ever seen by buy to let lending was 12.6% in 2007. Some experts have suggested that, due to increasingly competitive mortgage rates, 2013 might surpass this.
Lenders have recently been competing for the top spots on rates tables with record-low introductory interest rates, and have sparked a flurry of renewed interest in the past few months. This is thanks in part to the funding for lending scheme, which has allowed lenders to loosen their criteria; though with high fees and deposit requirements, lending conditions are still tougher than they were before the downturn.
Interest does not appear to have diminished, however, and this can likely be attributed to rising rents and increasing demand for rental properties. Around 8.5million people currently rent in the UK, and though competitive deals and government schemes may also help access to residential mortgages, the demand does not look set to ease.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.