BTL lending up 19pc in 2012

Sam Cordon

February 14, 2013

Buy-to-let lending accounted for 11.5% of total gross mortgage lending in 2012 up from 9.8% in 2011, according to full-year data.

Paul Smee, CML director general, said: “Buy-to-let is benefiting from strong tenant demand, which is likely to continue.

“Loan performance compares favourably with the owner-occupier sector, and the overall outlook for the buy-to-let sector is positive.”

A total of 136,900 buy-to-let loans were advanced during 2012 as gross buy-to-let lending reached £16.4bn.

On a quarterly basis there were 36,700 buy-to-let loans worth £4.6bn advanced in quarter four – up from 34,300 loans worth £4.2bn in the quarter three.

CML’s data revealed 1.14% of buy-to-let loans ended the year in arrears of more than three months, compared with 2.03% of owner-occupier loans.

However the annual repossession rate at 0.48% was higher than the equivalent owner-occupier rate of 0.27%, reflecting the different considerations involved in the two sectors.

Smee said: “Landlords who can demonstrate a strong track record are in a good position to expand their portfolios.

“However new potential landlords need to tread carefully before entering the buy-to-let market, considerations such as landlord licensing reinforce the need for potential landlords to gain a strong understanding of the legal and operating environment.”

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