'Q2 growth' for buy-to-let sector

Posted: 12 Aug 2011 16:33:11 GMT

The UK buy-to-let market enjoyed a return to growth across the second quarter of 2011, it has been shown.

The buy-to-let sector in the UK enjoyed a significant upturn throughout the second quarter of 2011, new research has found.

Carried out by the Council of Mortgage Lenders (CML), the study revealed the value of new buy-to-let loans jumped by 21 per cent in the second three-month period of the year, with this activity being directed primarily by remortgaging.

Between April and June, 32,000 such deals were taken out, which amounted to a combined worth of around £3.5 billion.

These figures were the greatest they have been since the final quarter of 2008.

Of the overall increase in such lending over the spell, remortgaging accounted for 65 per cent of the overall increases in the sector, with the value of the 15,230 loans for remortgage standing 27 per cent higher than that recorded in the previous quarter.

This value - which calculated at £1.6 billion - accounted for more than half (53 per cent) of the total gross buy-to-let lending and was up two percentage points on the 51 per cent reported in quarter one.

Paul Smee, director general at CML, said: "If you consider the buy-to-let recovery alongside the increase in first-time buyer numbers we published yesterday, it appears that first-time buyers are not being displaced by buy-to-let landlords but are holding their own."

The industry figure added: "This is encouraging news for those who want to rent, as long as it is realised that much of the current increase is for remortgage rather than house purchase."

Despite the positive signs, however, the market is still running at a level equivalent to one-third of that witnessed at the end of the same period in 2008.

The findings come after Paragon's Quarter Two Private Rented Sector Trends Report showed almost one-quarter of landlords are feeling optimistic about the prospects for their property portfolios.
 

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