Buy-to-let Mortgage Lending Up 20%

But lending is still far from its peak, say mortgage experts.

Buy-to-let mortgage lending has increased by 20% over the last year, signalling strong growth in the UK private rental sector (PRS).

New figures from the Council of Mortgage Lenders (CML) reveal that more than 33,000 loans worth £3.9 Billion (GBP) were advanced in the three months up to June 2012; an increase of 18% on the amount of mortgage advance’s compared with the same period in 2011.

Property investors and portfolio landlords are desperately attempting to purchase as much property for use in the UK PRS as they currently can, as rental yields are producing very healthy returns of between 8 – 14% in some areas of the UK.

However, the CML have warned that buy-to-let mortgage lending is still recovering from its 2009 low point and overall lending volumes remain at about 30% of their 2007 peak, hence the frustration of many landlords and property investors.

Paul Smee, Director General of the CML 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.”

PRS landlords know that demand for rental property is currently very strong, and those landlords who are actively looking for tenants for their empty buy-to-let properties, are urged to take steps to make sure the tenants are trustworthy and will be able to afford the rent.

PRS landlords should take a tip from professional letting agent practices and conduct background checks or Tenant Referencing for all applicants and should make use of Rent Guarantee Insurance products to alleviate financial stresses on themselves and their tenants and keep the rental cash flowing.

More details on Tenant Referencing and Rent Guarantee Insurance from Legal 4 Landlords can be found here