From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

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Buy-to-let lending increased in the second quarter

Published: 9 August 2012

Buy-to-let lending increased by 5% in the second quarter of 2012, according to data published today by the Council of Mortgage Lenders. In the three months to June, lenders advanced 33,200 loans, worth £3.9 billion (up from 32,300 mortgages, worth £3.7 billion in the first quarter). Year-on-year, the buy-to-let market continued to grow strongly, with the volume of loans up 14% (from 29,100) and the amount advanced up 18% (from £3.3 billion).

Growth in buy-to-let lending was evenly split between loans for house purchase and remortgaging, with both showing a 3% increase by volume over the first quarter. Year-on-year, lending for house purchase has grown more strongly (up 17% by volume and 21% by value) than remortgaging (up 10% by volume and 15% by value). However, buy-to-let lending is continuing to recover from a low point in 2009, and lending volumes remain around one-third of their peak in 2007.

The stock of buy-to-let mortgages continues to grow. At the end of the second quarter, the number of outstanding loans totalled 1,416,000, worth £160.7 billion (up from 1,405,000, worth £159.4 billion at the end of the first quarter, and from 1,338,000, worth £153 billion a year earlier).

The average maximum loan-to-value available on buy-to-let mortgages remained at 75%, with average minimum rental cover at 125%. Both have been broadly unchanged for the last three years.

The data showed a slight improvement in the performance of buy-to-let loans, with the proportion of borrowers more than three months in arrears declining from 1.69% at the end of the first quarter to 1.56% at the end of June (in the owner-occupied sector, the proportion was unchanged at 2.05%). 

The proportion of buy-to-let properties taken into possession was unchanged at 0.12%, while in the owner-occupied sector the data showed a small decline (from 0.08% to 0.07%). It is not surprising, however, to see a lower rate in owner-occupied households, where there is a concerted effort to extend forbearance wherever possible.

Commenting on the data, CML director general Paul Smee said:

"Buy-to-let is continuing to show signs of recovery, and growing broadly in line with expectations. The rental sector has grown strongly over the last decade or so, and buy-to-let continues to help deliver a wider choice for tenants."

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.2 million mortgages in the UK, with loans worth over £1.2 trillion.

2. CML buy-to-let data for the third quarter of 2012 will be published on 8 November 2012.

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