Buy to let mortgage activity steady for five quarters

13 May 2010

Buy to let activity has remained generally flat over the last five quarters seeing only a brief rise and then decline around the stamp duty holiday, data from the Council of Mortgage Lenders (CML) revealed today (May 13th).

The market saw a slight recovery towards the end of 2009 when purchases of houses valued under £250,000 were exempt from the tax, but the number of buy to let loans declined again in the first three months of this year as it settled back to its former levels.

With the number of mortgages granted to landlords in the first quarter of 2010 decreasing by 15 per cent on the previous quarter, the market is now unchanged compared with the first quarter of last year.

The CML reported a modest improvement in the level of buy to let arrears which it attributed to low interest rates. Debts of over 1.5 per cent the mortgage balance fell to 19,300 in total compared with 20,700 in the last three months of 2009.

Michael Coogan, director general of the CML, said: "Generally, prospects for the rental market are good. But uncertainty over house prices, interest rates and the availability of mortgage funding is continuing to hold back the buy-to-let market at this stage."

Mr Coogan stated that it was unclear yet how the new government would approach the private rental sector, adding that although there is room in the budget to support the market, the fiscal deficit would be the leaders' first concern.

The Association of Mortgage Intermediaries recently said that the reduction of the country's budget deficit was vital for the recovery of the property market.

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