Increase in UK home lending for buy-to-let landlords

For the first time since 2017, home lending for UK buy-to-let landlords has significantly increased.

In figures obtained from the Bank of England, lending shares in the buy-to-let sector have risen by 1.5% since last year. While the first quarter of 2017 saw buy-to-let shares account for 12.6% of new lending, the figure steadily increased to 14.1% in the first three months of 2018.

The data also shows new loans have increased by 3.3% year-on-year to reach £64.2 billion.

But what do these figures mean?

While landlords have faced a multitude of changes over the past few years, it appears the buy-to-let sector has remained impressively resilient. There are a number of reasons to why, as Liz Syms, chief executive officer of Connect for Intermediaries, explains:

"There are still very good returns to be had in the buy-to-let market, despite changes to the tax regime, portfolio landlord, EPC and the forthcoming tightening of HMO rules."

"Some people who are not serious about buy-to-let and not prepared for all the changes will have left the market," she added. "However, landlords that have well run properties kept to a good standard will still be making profits and, as a result, are continuing to expand their portfolios, so I think this is what we are seeing in these figures from the Bank of England."

However, the quarterly study also harboured some bad news.

The Bank of England revealed the share of first-time buyers has now fallen to 19.6%. What's more, the outstanding balance in arrears (money that is owed and should have been paid earlier) has now reached £14.8 billion, while the share of loan-to-value mortgages also decreased.

Jeremy Leaf, former residential chairman at RICS, shared his thoughts on the disappointing figures:

"The reduction in the proportion lent to first-time buyers when buy-to-let investor borrowing increased for the first time in more than a year may be a sign that the government’s intention to ‘level the playing field’ between the two groups is not working."

Vincent Burch offer comprehensive advice for a range of BTL mortgages.

So if you're a portfolio or professional landlord, or a first-time landlord looking for advice, please get in touch. Give us a call on 01603 340 644 or email [email protected].

We also provide support for first-time buyers, such as advice about 95% LTV mortgages and the Help-to-Buy government scheme. As an Independent Mortgage Adviser, we offer the best first-time buyers rates—and the majority of applications will not incur a broker fee!