Remortgage lending in the buy-to-let sector of the market surged by a almost a third in June, according to the latest figures from the Council of Mortgage (CML). The increased activity is “a sure sign of savvy buy-to-let investors capitalising on the record low interest rates that have been available, ” David Copland, director of […]
Remortgage lending in the buy-to-let sector of the market surged by a almost a third in June, according to the latest figures from the Council of Mortgage (CML).
The increased activity is “a sure sign of savvy buy-to-let investors capitalising on the record low interest rates that have been available, ” David Copland, director of TMA mortgage club, said.
Remortgaging overall was on the rise in June as speculation that the Bank of England is ready to raise the base rate soon has prompted many borrowers to look for better offers while they are still available. Experts have also been calling on borrowers to consider their options before the rate rises.
Buy-to-let investors took out 11,500 loans in June 2015, which was 29.2 per cent more than in May and 53.3 per cent more than in June 2014. The value of these loans grew 28.6 per cent on the month to £1.8 billion. At 63.6 per cent, the change from the previous year was particularly significant.
The house purchase loans advanced to buy-to-let borrowers in June amounted to 10,400 and their total value stood at £1.4 billion. The was an increase of 16.9 per cent in terms of volume and of 16.7 per cent in terms of value as compared to the previous month. On an annual basis, the increase in volume (23.8 per cent) and value (40 per cent) was more pronounced.
Buy-to-let lending developed well during the second quarter of the year as well, especially compared to a year ago. Like in June, growth was chiefly driven by remortgaging activity. The overall number of buy-to-let loans in the second quarter was 58,000 and their total value summed up to £8.8 billion. Compared to the first quarter of 2015, this was a 10.9 per cent rise in number and a 12.8 per cent rise in value. The change from the second quarter of last year was 25.5 per cent in terms of volume and 39.7 per cent in terms of value.
“Following the summer budget the question is what, if any, impact will the tax relief changes for buy-to-let landlords have on the market in the longer term?,” Copland asked.
