The Council of Mortgage Lenders (CML) has announced details on the growth of Buy-To-Let mortgages in the UK as more landlords enter the rental property market.
Over the past quarter, buy-to-let mortgages have created a gross total of £4.2 Billion (GBP) across 33,500 mortgages and CML reports that there are now around 1.46 Million buy-to-let mortgages held by landlords in the U.K.
According to the CML, by the end of March 2013 UK buy-to-let mortgages accounted for 13.4% of the total outstanding mortgage lending in the U.K.
The increase in lending for buy-to-let mortgages shows steady growth from the previous quarter at 13% and 12.9% at the end of the first quarter of 2012.
The latest CML report also highlighted that buy-to-let mortgages account for 8.3% of all mortgages reported as being in arrears over the past three months, a significant drop from the 10.5% reported in the first quarter of 2012.
Paul Smee, CML director General, said: “The buy-to-let mortgage market is performing well, against a backdrop of robust landlord and tenant demand for good quality rental property. Loan performance compares favourably with the owner-occupier sector, and buy-to-let continues to grow as a proportion of the overall mortgage market. As the private rented sector looks likely to be the longer-term tenure in which more households may live in the future, lenders are actively looking at how they can best evolve their future lending for those landlords who may wish to offer longer-term tenancies to their tenants – although concrete landlord demand for such borrowing is not yet clear.”
While the UK economy has remained challenging over recent years, the UK buy-to-let market has continued to grow in strength. The increasing availability of suitable buy to let mortgage funding is creating a good opportunity for existing landlords to increase their rental property portfolios to pursue higher rental yields and encourages new landlords to purchase property so that they too can enter the profitable private rental sector (PRS).
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