Buy to Let mortgage lending reaches highest level since 2007

New data from the Council of Mortgage Lenders (CML) shows that while buy to let lending experienced a slight quarter to quarter decrease in Q4, overall in 2015 year-on-year buy to let lending was at its highest since 2007.

The CML has reported that its latest figures reveal a ‘mixed picture’ across all types of lending, including buy to let lending.

In December, gross buy to let figures showed month-on-month decreases, down by 3% in volume and 3% in value.

Similarly, in Q4 2015 gross buy to let lending experienced a slight quarter-to-quarter decrease: down 1% on volume and 1% on value.

In 2015, however, gross buy to let lending saw a year-on-year increase of 28% by volume and 39% by value, as such hitting its highest level since 2007.

Overall buy to let lending in 2015 totaled £37.5 million.

Jeremy Duncombe, director, Legal & General Mortgage Club, said:

“Lending saw significant growth in 2015 as increasing house prices necessitated the uptake of larger loans to secure properties. Buy-to-Let and remortgage business were significant contributors to this annual growth, as more people sought to make the most of their money.

“...the attractive returns offered by Buy-to-Let opened up more people to the prospect of becoming a landlord. With the new Stamp Duty changes now firmly on the horizon, Buy-to-Let lending is likely to spike due to a surge in demand in the first few months of 2016."

David Whittaker, Managing Director of Mortgages for Business, comments:

“Buy to let is charting a reliable course – that is the biggest surprise given fears of upheaval. December is always a sluggish month for the overall lending market, as Christmas and New Year captures the attention of most investors. Yet the buy to let market has remained stable despite the winter chill. The sector still accounts for around 18% of the overall mortgage market – a remarkably steady performance compared to previous years.

“The figures reveal remortgaging is the main driver of the buy to let sector’s stable progress – something corroborated by our latest Complex Buy to Let Index. Yes, there are investors out there with sizeable portfolios who are keen to expand. But right now there are also many players who are stepping into this sector for the first time. They aren’t perhaps looking to build a property empire, but do want to make their first strike before 1st April Stamp Duty hike kicks in.

“Looking forward, this quarter we are seeing a flurry of activity which we anticipate will be balanced by a cooler month or two in April and May. This is only a very short-term shift. We expect the buy to let market to settle back into the steady rhythm we’ve been seeing recently, as it continues to attract mainly those investors looking for patient profit rather than a lucky buck.”