First Time Buyers and Buy To Let Lending UP

New Council of Mortgage Lenders (CML) data released yesterday on the profile of UK lending in March 2014, shows first-time buyers took out 24,400 loans in March, 24% more than in March last year. In quarter one of 2014, there were 34% more first-time buyer loans compared to the first quarter of 2013.

Gross buy-to-let loans advanced increased in March by 10% compared to February and up 56% on March last year. First quarter results show gross buy-to-let loans advanced rose just 1% compared to the fourth quarter of 2013 but up 46% in volume compared to quarter one last year.

Paul Smee, director general of the CML, said: “All types of lending show positive year-on-year growth but the rate of increase is not as frenetic as at the end of 2013. Buy-to-let lending continues to recover and regain market share.

“The FCA’s new regulation of mortgages has now been introduced, but it will still be some time until we can assess its effect on the market. The industry was ready for the transition, and already actively implementing many of the changes prior to April. We do not anticipate prolonged disruption to the market as a consequence. But we still see affordability constraints as an important factor in determining the level of demand for mortgages which we see over the next year.”

Karen Bennett, sales and marketing director of commercial mortgages at Shawbrook Bank, said: “The continued strength of the buy-to-let sector is evidence of the ongoing economic recovery and a sign of the favourable climate that the current low interest rates have created. However, with calls from the OECD and others for more controls on the housing market, we may see rate rises sooner than anticipated.

“We have always advocated sensible borrowing and property investors need to look closely at their portfolio and carefully consider whether to take on more properties. They need to make sure that their portfolios will generate enough income to cover mortgages if interest rates go up suddenly.”

George Spencer, chief executive officer of lettings agency Rentify, said: “These figures highlight the continuing strength of the buy-to-let sector. With the number of buy-to-let mortgages advanced up 46% on the same quarter last year, it is an indication of the confidence investors have in the rental property market. The growing demand for rental properties and the availability of buy-to-let mortgages with easier eligibility criteria and low rates has again proven key to the success of this vital part of the UK economy.

“It remains to be seen if the political manoeuvring by the main parties will have any effect on this confidence, though neither the Coalition nor Labour have shown a clear understanding of the issues affecting the rental market.”

%d bloggers like this: