The number of buy-to-let mortgage
loans reached its
highest level for four years last
year, the latest figures show, as record rents encouraged landlords to expand
their property portfolios.
Gross
buy-to-let lending reached £16.4bn over the year, up 19% on the £13.8bn
advanced in 2011, the Council of Mortgage Lenders (CML) said.
The
total number of buy-to-let mortgages outstanding at the end of 2012 jumped to
1.4m, or 13% of all mortgages, up from 12% in 2009 and 9.6% in 2006.
In
total, 136,900 of the loans were advanced during 2012, the highest number since
2008 – though still far from the high of 346,000 seen in 2007.
The
CML said the buy-to-let market was benefiting from strong tenant demand,
"which is likely to continue". Its director general, Paul Smee,
added: "The overall outlook for the buy-to-let sector is positive.
Landlords who can demonstrate a strong track record are in a good position to
expand their portfolios."
Jonathan
Harris, director of mortgage broker Anderson Harris, said the figures reflected
greater numbers of would-be first-time buyers turning to renting while they
struggle to get a foothold on the housing ladder. "This is pushing up
rents, making the sector increasingly attractive to investors," he said.
The CML also said the number of homes
repossessed by mortgage lenders in the last three months of 2012 was the lowest since
2007, but a greater number of households ended the year struggling
with large arrears.
There
were 7,700 properties repossessed in the fourth quarter of 2012, down from
8,200 homes in the previous three months, and the lowest three-month figure
since the fourth quarter of 2007.
The
CML said the figures showed lenders were trying to keep borrowers in their
homes and are only taking possession "as a last resort".
In total, there were 33,900 repossessions in 2012, down 9% from the 37,300
repossessions seen in 2011.
Mortgage
arrears cases were also down, with 157,900 households ending 2012 with arrears
of 2.5% or more of the mortgage balance, compared with 161,400 at the end of
2011.
However,
the number of households in arrears equal to 10% or more of their mortgage
balance increased, from 28,200 at the end of 2011 to 28,900 at the end of 2012.
"Households
fall into difficulty for a variety of reasons, most of which cannot be
anticipated," Smee said. "Wherever possible, lenders will work with
borrowers to manage periods of temporary financial difficulty and enable them
to keep their home. Anyone worried about their situation should talk to their
lender, who will try to help them."
Harris
said borrowers in trouble should ideally seek help before they miss a payment.
"Many households are still struggling financially," he said.
"While base rate is expected to stay at 0.5% for the foreseeable future,
there are thousands of people who have already got into difficulty and are struggling
to get out of it.
"Only
those with significant equity cushions can access the market-leading deals.
Those up against it and in danger of having their homes repossessed don't have
this luxury so can't remortgage on to the cheapest rates. Subsequently, some
homeowners are getting into difficulty paying their mortgage on top of high
living costs, low wage rises, and in some cases losing their jobs."
Repossessions made by
second-charge mortgage providers were also down in 2012, according to the
Finance & Leasing Association. The repossessions, which can be ordered on
the back of failure to repay any secured debt, fell by 24.1% in 2012 from 827
to 628.Click here to read the original article: "Buy-to-Let Lending Bounces back as Landlords Cash In on Rising Rents"
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