The value of these loans totalled £1.9bn, which was unchanged from August.
Overall buy-to-let lending in the third quarter of 2013 grew with 43,900 loans advanced in this quarter which was up 16% on the second quarter of 2012 and 36% compared to last year. These loans were worth £5.7bn which was up 19% on the previous quarter and 43% up compared to the same period last year.
The growth in buy-to-let in the third quarter of 2013 was driven by both buy-to-let house purchase and buy-to-let remortgage. Buy-to-let house purchase lending increased in the third quarter to 22,790 loans advanced compared to 19,410 in the second quarter of 2013. This was also a 29% increase on the third quarter of 2012.
Buy-to-let remortgage lending also increased in the third quarter, up 15% on the second quarter of 2013 and up 42% on the third quarter of 2012. The value of these loans also increased in September to £2.9bn, up 19% on the second quarter of 2013 and up 53% in value compared to the third quarter of 2012.
Karen Bennett, Sales and Marketing Director, Commercial Mortgages, Shawbrook Bank, had this to say about the increase:
“The on-going buoyancy of the buy-to-let market is good news for the UK property market in general and combined with the Bank of England’s decision to keep interest rates frozen, it’s a good time to invest in property. To a certain extent the buy-to-let market has been the driving force behind the revival of the property market in the UK. However, now is the time to be careful and not get carried away by market optimism. There needs to be caution on both sides as the current unusual conditions can’t last. Lenders need to be responsible about the funding they provide based on rental income as well as the experience of the investors they fund. Equally, there is a lot of excitement among investors, but they should keep a close eye on their portfolios to make sure that once the inevitable happens and interest rates rise, their properties generate enough rent to cover the mortgages."
Lucy Hodge, Director of Vantage Finance said:
“Today’s figures certainly reflect what we have been seeing in the market. Demand for BTL products is growing, thanks to a buoyant rental market that shows no signs of slowing. It’s a long time since there have been enough BTL products to satisfy the needs of property investors, and at the moment any new products are snapped up really quickly.
“Funding solutions beyond the high street are proving particularly popular. As a result of restricted criteria and fairly restrictive maximum exposure limits from mainstream lenders on the number of loans, or volume of lending to an individual, many have sought out more comprehensive solutions from commercial lenders, or those more geared toward professional landlords where there is scope for larger portfolios.
“There are still significant opportunities for lenders to fulfil demand in the BTL market and it would be exciting to see more creative solutions from lenders. Nevertheless, the increase in lending announced today is a positive reflection of the market’s current strength.”
