The first half of 2005 saw lenders advance around £9.9 billion in new buy-to-let mortgages, which is marginally higher than the second half of 2004. However, the number of new loans declined by 4 per cent in the first half of this year to 94,000, although this is a more modest reduction than the 18 per cent fall in the second half of last year.
The total size of buy-to-let business is now worth £63.5 billion. There are currently 632,000 buy-to-let mortgages, representing 7 per cent of all outstanding residential mortgage lending.
The number of buy-to-let mortgages three months or more in arrears increased in the first half of this year to 0.70 per cent from 0.66 per cent in the second half of 2004.
Andrew Heywood, senior policy adviser at the CML, said: “As the housing market continues on its ‘soft landing’ it is no surprise the buy-to-let sector follows suit.
“Our half-yearly figures suggest the market is in robust shape and the recent cut in interest rates by the Bank of England will serve to buoy up the sector in the coming months.”
Rod Murdison, proprietor of Murdison & Browning, agreed with the CML findings: “The market is suffering as the perceived risk for new entrants is still quite high.
“The margin between making a profit and what you invest is becoming tighter to the point where some investors are having to put some of their own money towards paying the mortgage on their buy-to-let property.”
