This was 5% down on the fourth quarter of 2011. While 32% higher than in the first quarter of 2011, buy-to-let lending is still only around a third of its 2007 levels.
Buy-to-let lending for house purchase in the first quarter fell by a greater amount (9%) than remortgaging (1%), but both were around 30% higher than in the first quarter of 2011.
The buy-to-let sector continues to increase its share of the mortgage market, with buy-to-let mortgages representing an estimated 12.8% of the total value of outstanding mortgages at the end of the first quarter, up from 12.6% at the end of 2011 and 12.2% at the end of the first quarter of 2011.
The total number of buy-to-let mortgages stands at just over 1.4 million, with a total value of £159.4 billion.
The average maximum loan-to-value available from lenders on buy-to-let mortgages remained at 75% in the first quarter of the year, with the average minimum rental cover 125% - up from 123% in the previous quarter, but otherwise the same as for nearly three years.
In terms of loan performance, the number of buy-to-let mortgages in arrears fell a little in the first quarter of 2012, and the arrears rate on buy-to-let mortgages continues to be lower than in the owner-occupied sector.
At the end of the first quarter, around 1.7% of buy-to-let mortgages were in arrears of more than three months (including cases where a receiver of rent has been appointed), compared with around 2% of owner-occupier mortgages.
The repossession rate was 0.12% - virtually the same as for the last five quarters - compared with 0.08% in the owner-occupied sector. It is not surprising that the buy-to-let repossession rate is higher than in the owner-occupier sector, where the focus is on forbearance and trying to keep home-owners in their homes.
In the rented sector, expired tenancies allow repossession to be undertaken without unexpected disruption to tenant households. In absolute terms, the number of buy-to-let repossessions remains only a small proportion of total repossessions.
Commenting on the latest buy-to-let results, CML director general Paul Smee says:
"Even though buy-to-let lending is running at only around a third of its peak levels, the sector is continuing its gradual expansion. It has become an important part of the overall landscape of housing provision in the UK."
David Brown, commercial director of LSL Property Services, comments:
“Banks and buildings societies are looking towards the burgeoning private rented sector as a bright spot in an otherwise gloomy mortgage market. Strong rental incomes are helping provide very healthy yields - in contrast to historically low mortgage rates - and these are bolstering demand for buy-to-let mortgage finance on an annual basis from both new and existing property investors.
"While the wider market remains subdued, and finance remains tough for first-time buyers to secure, the buy-to-let sector will continue to gather momentum to account for a growing proportion of the residential mortgage market.”
David Whittaker, managing director of Mortgages For Business said:
“The year-on-year rise in buy to let lending reflects the state of the overall property market. Demand for rental property is as strong as ever as mortgage funds remain out of reach for many would-be buyers and high-street banks remove scores of owner-occupier mortgages from the market. While the overall value of lending fell quarter-on-quarter, this has more to do with stagnant and falling prices rather than a drop in landlord appetite.
"Indeed, with the residential property investment sector steadily increasing its share of the overall mortgage market and with investors becoming more and more interested in higher yield complex buy to let deals, the buy to let sector seems on course for a positive year”
