Buy-to-let lending still slowing down according to CML

The first half of 2005 saw lenders advance around £9.9 billion in new buy-to-let mortgages, which is marginally higher than the second half of 2004 according to new data from the Council of Mortgage Lenders. However, the number of new loans declined by 4% in the first half of this year to 94,000, but this is a more modest reduction than the 18% fall in the second half of 2004.

The total size of the buy-to-let sector continued to expand in the first half of 2005, and is now worth £63.5 billion. There are currently 632,000 buy-to-let mortgages, representing 7% of all outstanding residential mortgage lending.

The number of buy-to-let mortgages three months or more in arrears increased in the first half of this year to 0.70% from 0.66% in the second half of last year. This is less than the percentage increase in arrears levels being witnessed in the entire mortgage market and the figure remains low in comparison to the 0.87% arrears rate in the market as a whole.

The average maximum lenders will agree to lend has remained unchanged for almost five years at 80% of the value of the property.

Commenting on today's figures, CML Senior Policy Adviser Andrew Heywood said:

"As the housing market continues on its "soft landing", it is no surprise the buy-to-let sector follows suit. Our half-yearly figures suggest the market is in robust shape, and the recent cut in interest rates by the Bank of England will serve to buoy up the sector in the coming months. However, lenders will not be complacent, and will keep a close eye on lending to ensure it is responsible and sustainable."

Note to Editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. There are 11.5 million mortgages in the UK, with loans worth around £876 billion.
   
2. You can view our latest figures on the buy-to-let market attached below.
   
3. The CML has recently published a statement on property investment clubs (PICs) making clear that PICs are not part of the mainstream buy-to-let market. This is attached below.