Buy-to-let lending grows 12pc in July

Robyn Hall

September 12, 2013

The number of buy-to-let loans reached 15,200 in July representing a value of £2bn, 11% higher than in June.

Stephen Johnson, managing director of Commercial Mortgages at Shawbrook Bank, said: “This morning’s announcement of the rise in buy-to-let lending is great news for the industry and Shawbrook is keen to support professional investors looking to take advantage of these market conditions.

“However as an industry we must be careful to not create another bubble. At the moment lending conditions are very good but these are unusual times and the UK needs to create a sustainable market not one lurching from peak to trough.”

Johnson said those looking to buy property need to ensure they look at the long term because investors need a portfolio that can still work in a more normalised interest rate environment.

He added: “Sensible gearing will maximize returns while over-gearing now could potentially put at risk investors’ hard earned equity.”

Lending for buy-to-let house purchase was up 7% in July compared to June bringing the total for loans advanced for purchases to 7,600. The value of these loans was £900m, up 13% from June.

There was strong growth in buy-to-let remortgage lending which increased by 24% in July compared to June worth £1.1bn.

This equated to 7,200 loans in July for buy-to-let remortgage in total, an increase by 13.4% on June 2013.

David Whittaker, managing director of Mortgages for Business, said: “Buy-to-let lending is going strong. We are seeing large numbers of landlords refinancing in order fund new investment properties.

“Gross yields generally are north of 6% and are even higher on houses of multiple occupancy and multi-units. Buy-to-let lenders have lowered rates over the past twelve months and are more willing to offer higher loan to value deals which has encouraged greater activity from property investors.”

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