The Council of Mortgage Lenders (CML) data also revealed that by the end of June 2007, the number of buy-to-let loans outstanding had reached a record 938,500. The value of outstanding loans totaled GBP108 billion – also a record and an increase of 14% on the second half of 2006. Buy-to-let lending now accounts for 10% of mortgage balances, compared to just 3% five years ago.
During H1 2007, the number of loans taken out was 3% lower than in H2 2006. However, there was a modest 2% growth in the value of new buy-to-let lending, driven primarily by higher property values.
Although the rate of growth of the buy-to-let sector slowed in the first half of this year, it was stronger than in the wider mortgage market, in which the value of lending declined by 4%. As a result, buy-to-let lending accounted for 12% of all advances in the first half of this year – the highest proportion seen to date.
According to the CML, a strong rental market, in which landlords are reporting rising rents and shorter void periods, helped ensure that buy-to-let arrears remained lower than in the wider mortgage market.
