Number of buy-to-let mortgages continues to grow

Meanwhile, repossession figures dropped over the last three months.

The value of buy-to-let mortgages taken out between July and
September was £4.2 billion, an increase of 8 per cent over the
previous three months.

According to figures published today by the Council of Mortgage Lenders, the value of buy-to-let lending in the first nine months of 2012 was £11.8 billion, 19 per cent higher than the same period in 2011 However, the Council estimates that buy-to-let lending this year is likely to total a little over one-third of its peak in 2007.

CML director general Paul Smee said: “Buy-to-let lending is continuing to recover and to grow in line with expectations. As well as continuing to fund owner-occupation, lenders are contributing to the expansion of a strongly growing rental sector.”

The Council’s figures also show that 8,200 properties were repossessed between July and September, down from 8,500 in the previous three months and 9,600 at the same time last year. It marks the lowest number of properties repossessed since 2007.

“Banks are doing a great job of keeping struggling borrowers in their homes,” said Richard Sexton, director of e.surv chartered surveyors. “Long-term arrears have risen yet repossessions are down, which is thanks to lenders’ generous forbearance policies. The issue is whether this is a sustainable approach in the long-term. This is the fourth quarter in a row where arrears of 10 per cent or more have increased, yet repossessions have remained broadly flat. Banks won’t be able to go on absorbing long-term arrears into their balance sheets infinitely, and they also have a duty of care to ensure borrowers don’t build up ‘too much’ debt by allowing them to stay in a property if this is unsustainable.”

Article courtesy of The Independent

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