Although the mortgage market is still substantially below what it was when the market was peaking in 2007, the Council of Mortgage Lenders recently stated that the market for buy-to-let mortgages is on the rise. Not only is a tight residential mortgage market cause for this increase in demand, but also the fact that many homeowners have been foreclosed upon and are seeking rental properties.
In fact, the second quarter of 2011 has seen the busiest demand for buy-to-let mortgages since the financial crisis began back in 2008. In the second quarter of this year, CML reports that 32,000 loans were granted which further indicates the need for buy-to-let investors. Even so, they were quick to admit that 65% of those mortgages were refinances within the buy-to-let market.
As of the end of July, it is recorded that there were buy-to-let mortgages totalling 1.34 million and those mortgages have a net worth of £154.4bn. This is up from 1.26 million of the same type of mortgage in the same period of last year. Last year’s net value of buy-to-let mortgages during this period was £148.8bn.
Some other interesting statistics include the fact that first time homebuyers were up by 24% which is indicative of the fact that buy-to-let mortgages hadn’t displaced that segment of the population. As well, it is worth mentioning that buy-to-let repossessions are up by 9% from the first quarter of 2011. The total of repossessions stand at 1700 from the first quarter increased to 1900 in the second quarter.
Although this appears to be great news for those looking to let a house, it should be remembered that 65% of the new mortgages from this quarter are refinancing mortgages. Even so, the available number of rentals is still significantly higher than in this same period last year which means that rental properties are available for those who qualify.