Buy-to-let lending on the up

News Category: Industry News

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Lending for home purchases fell by 11 per cent in the year ending August, while the number of people remortgaging declined by 12 per cent. At the same time, 'other' lending - made up mainly of buy-to-let - increased by 37 per cent over the same period.

That is according to new figures released by the Council of Mortgage Lenders (CML) which revealed that lending was £1 billion higher in August that it had been 12 months earlier, in large part because of landlord borrowing.

The trade organisation said that activity in the buy-to-let market was being driven by increasing house prices, tenant demand, rent rises and the willingness of many landlords to make long-term investments.

The research also showed that affordability is becoming an increasing problem for first-time buyers, who now spend 20 per cent of their income servicing mortgages, the highest level in 16 years.

"Affordability clearly remains challenging but there may be some relief for borrowers with expectations of an interest rate cut, perhaps as early as November," said Michael Coogan, CML director.

However, two year swap rates climbed by ten points to 5.93 per cent earlier this week, indicating that the recent fall in mortgage rates could shortly be over.

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