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Buy-to-let lending reaches highest level in four years

Gross buy-to-let lending reached its highest level in four years in 2012, according to the Council of Mortgage Lenders.

At £16.4bn, gross buy-to-let lending was 19 per cent higher than the £13.8bn advanced in 2011.

Buy-to-let lending accounted for 11.5 per cent of total gross mortgage lending in 2012, up from 9.8 per cent in 2011.

There were 36,700 loans, worth £4.6bn, advanced in the fourth quarter, up from 34,300 loans worth £4.2bn in the third quarter and 34,200 loans worth £3.9bn in the fourth quarter of 2011. In total, there were 136,900 buy-to-let loans advanced during 2012.

The market has shrunk considerably since peaking at £45bn in 2007 but has almost doubled in size since 2009 when it reached £8.5bn. This grew to £9.7bn in 2010 and £13.8bn in 2011.

CML director general Paul Smee says: “Buy-to-let is benefiting from strong tenant demand, which is likely to continue.”

Mortgages for Business managing director David Whittaker says: “I believe we will see buy-to-let lending increase by 10 to 15 per cent year-on-year, possibly even up to £20bn.”

Separately, the CML last week released statistics showing repossessions in Q4 were at their lowest level since the last quarter of 2007. The number of properties taken into possession fell from 8,200 in the third quarter of 2012 to 7,700 in the fourth, the lowest quarterly figure since Q4 2007 when it was 6,900.

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