January 16th, 2015
Buy to let mortgage lending saw a sizeable increase in November, according to figures released by the Council of Mortgage Lenders yesterday.
New figures show an increase in lending to landlords of 9% in November; compared to a fall in residential lending of 7% during the same period.
“For much of 2014, the dreaded Mortgage Market Review was the reason that most gave to explain a drop in mortgage lending” said Taj Kang, Business Development Director at leading niche-broker Contractor Mortgages Made Easy.
“Whilst that is undoubtedly true, I think the figures that the CML have released this week show a very different cause. With inflation tumbling and interest on savings dwindling; many are turning to property as a safer investment, with £2.4bn of funds lent to landlords during November alone.”
“Given the impact of MMR on residential funding, and the fact that the Buy to Let market remains unregulated, many see it as a sensible, hassle-free investment option ahead of other more traditional savings routes.”
Other revelations in the CML’s monthly report showed that mortgage lending to first time buyers saw a month-on-month lending decline, with 25,900 loans being approved in November, down 11% from October.
New-build giant Barratt Homes meanwhile has announced an increase in forward sales of nearly a sixth, to £1.86bn, as it plans to build its highest number of homes for the last 7 years, in order to meet demand.
“'Over the next six months we plan to open around 90 new sites which will give us the highest average number of developments for six years” said Mark Clare, Barratt Chief Executive, adding that the group was on track for another “significant improvement” in its financial performance for the year.
These figures in particular are reasons to be cheerful, explains Taj Kang.
“With other new-build companies Taylor Wimpey and Persimmon also announcing health financial pictures recently, a 17% increase in forward sales is certainly good news. Due to pressures on the economy following last week’s fall in inflation, it’s unlikely that we will see a rate hike in the short term, which should set out a positive picture for the housing and mortgage market in 2015.”
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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