The latest buy to let survey from the CML shows that the sector is showing signs of recovery.
24,900 buy to let mortgages were approved in the second quarter of this year compared to 22,000 in Q1 and 21,600 in the comparable period last year.
At the end of June, there were 1.26 million buy to let mortgages outstanding with a total value of £149bn and they accounted for 12% of all mortgages. This is the highest level we’ve seen since the end of 2008.
Michael Coogan, the director general of the CML, predicted that demand for private rented property will remain high as fewer first-time buyers can afford to purchase a property.
He says that UK financial institutions must ensure that finance is available for private landlords in order to meet the population’s housing demand.
The CML’s report also showed that 18,500 people had arrears of at least 1.5% on their outstanding mortgage. This is a slight improvement on the end of 2009 when the figure stood at 19,300. There was however a slight rise in the number of repossessions; up to 1,600 from 1,400 in 2009.
Whilst high deposits have meant that many people are unable to get their first foot on the housing ladder, a recent survey by Zoopla suggests that it works out cheaper to take out an interest only contractor mortgage on a property rather than renting in almost 75% of locations in the UK.
In fact data from Moneyfacts.co.uk suggests that first time buyers are becoming more active as mortgage rates decrease. The average fixed rate for first time buyers with a 10% deposit has dropped by 0.33% in the last six months.
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Image: To Let by Ruddington Photos
