There were 25,800 new loans advanced in quarter four, up from 23,700 in the third quarter but down from 38,000 in the fourth quarter of 2008. The 2009 growth is from a very low base after a consistent decline through seven consecutive quarters. Gross advances totalled £2.4 billion in the fourth quarter of last year, up £300 million from the third quarter but down £1.6 billion from the fourth quarter of 2008. Volumes remain comparatively low, both in absolute terms and as a percentage of overall lending.
For 2009 as a whole, there were 93,500 buy-to-let loans advanced. This is 58% down on the number advanced in 2008 (222,700) and is the lowest annual volume since 2001. Buy-to-let gross lending was £8.5 billion, down from £27.2 billion in 2008. Buy-to-let lending represented only 5.9% of all lending in 2009 (10.7% in 2008), but the total value of outstanding buy-to-let loans still represented around 11.8% of the mortgage market despite the recent shrinkage in new business.
All types of buy-to-let lending increased in the last three months of 2009. As with the mainstream mortgage market though, loans for house purchase continued to be advanced at about twice the rate of loans for remortgage with 62% of new buy-to-let loans being for house purchase. For 2009 as a whole, 60% of buy-to-let lending was for house purchase, compared to just 46% in 2008, demonstrating an ongoing demand to increase residential investment portfolios if finance is available.
Commenting on this latest buy-to-let data, the CML’s director general Michael Coogan said: “The figures show that the buy-to-let market continued to improve, albeit slowly, throughout 2009, and we are encouraged by this recovery. The new business market remains well below previous levels though, and below the level of activity which is needed to enhance a vibrant private rental sector in the UK. We are concerned that future, wrongly directed, regulation may actually prevent buy-to-let playing its vital role in providing good quality homes and wider housing choices for people who cannot afford home ownership or do not qualify for social housing.”