Buy To Let Market Continues to Grow

May 28, 2013 - PRLog -- “This compares with £4.6 billion the previous quarter,” says Simon Tebbutt of Bournecoast, “…and £3.7 billion in the first quarter of last year.”

Almost 50% of this lending was for re-mortgage, rather than house purchase, yet the buy-to-let sector still continued to grow with improved loan performance.

By the end of March buy-to-let lending accounted for 13.4% of total outstanding mortgage lending in this Country an increase of 0.4% on the previous quarter and 0.5% at the end of the first quarter last year.

There are now around 1.46 million buy-to-let mortgages in the UK which accounts for around 13% of the total estimated stock of 11.26 million mortgages.

Only 8.3% of all mortgages in arrears of over three months were buy-to-let (down from 9.0% the previous quarter and 10.5% in the first quarter of last year), with possession rate, at 0.11%, being higher in the buy-to-let sector than the 0.07% in the owner-occupied sector, but fell from its previous quarterly rate of 0.12%.

According to the report, Paul Smee, Director General of the CML said:  "The buy-to-let mortgage market is performing well, against a backdrop of robust landlord - and tenant - demand for good quality rental property. Loan performance compares favourably with the owner-occupier sector, and buy-to-let continues to grow as a proportion of the overall mortgage market.

“As the private rented sector looks likely to be the longer-term tenure in which more households may live in the future, lenders are actively looking at how they can best evolve their future lending for those landlords who may wish to offer longer-term tenancies to their tenants - although concrete landlord demand for such borrowing is not yet clear."

Simon Tebbutt said: “Our economy generally may be depressed but the buy to let market is going great guns. High yields plus stagnant property prices with improved financing options all add up to encouraging investors to add to their portfolios. Life may have become marginally easier for first-time buyers in the last six months although the flow of first-time buyers is still barely a dribble, which is sending the excess in demand directly into in the rental sector.  Consequently yields are kept high for buy to let investors and sees landlords taking full advantage of returns available, which is why Bournecoast has seen an increase in the number of buy to let investors trying to refinance in the first quarter as they look to expand their portfolios.

"This activity has been helped by increased competition between the buy to let lenders. Rates and fees are down and there are increasing options for landlords looking to finance more complex deals. The Funding for Lending Scheme too has helped by loosening the supply of credit to lenders, and they are passing the savings on to investors.”

He added, “Buy to let boomed in the first quarter of this year with gross mortgage lending up by £500million against the same quarter of last year. Poor savings rates have sparked interest in the buy-to-let market as investors look to capitalise on growing tenant demand and strong long-term returns.”

The increase in demand for privately rented property reflects the growing appeal of flexible living arrangements instead of being a second-best option. Renting can often compliment the lifestyle of many people with changeable personal circumstances, especially those with roaming work locations and seasonal commitments.

He concluded, “These latest figures from the CML are highly encouraging, proving that there has been strong growth in the residential buy-to-let property sector, evidenced by solid demand for quality rental property throughout the UK from tenants and landlord alike.  It is equally good to see that there seems to be an easing of credit conditions with increased lending this quarter compared to the same quarter last year.

So, whether you’re a landlord looking to increase your portfolio of properties, or a tenant looking for a local, independent property agent that has been family run for over 50 years, is part of the NAEA and ARLA with highly qualified staff, then contact Bournecoast for free, impartial advice or for an analysis of the return you can expect from your property, on 01202 437888 or visit www.bournecoast.co.uk.  

ENDS

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Further Information:

In 2010 Bournecoast celebrated it’s 50th anniversary and has been family run since it’s inception when it was established by Major & June Webb in 1960.  Keith Simmons MBE, the previous managing director and Major Webb’s son-in-law, was then joined by his son and daughters, Des Simmons, Veronica Strongman and Anita Smith, who now run the company with a team of eighteen staff.

Bournecoast Property Agents have extended their skill base within the ever changing property market and deal with providing self catering holiday accommodation, high quality short term lets (for example to tenants), long term lets and are also an estate agency for people wishing to buy or sell their property locally.

Over the past 50 years Bournecoast has invested in a skilled workforce, ensuring each member of the team enjoys dealing with people and property whilst ensuring their knowledge of the whole property market is second to none, providing advantage over most local agents.

Issued by:

Alex Eaton

Marketing Manager

Bournecoast

alex@bournecoast.co.uk

01202 437888