The figures show that lenders advanced 152,500 loans, worth £17.5 billion, in the first six months of 2006 – representing an increase of 17 per cent by volume and 20 per cent by value over the previous record totals posted in the second half of 2005.
The CML’s findings show there are now 767,000 outstanding BTL mortgages in the UK, worth a total of £83.9 billion. The proportion of BTL mortgages in arrears of three months or more rose slightly, from 0.68 per cent of the stock to 0.73 per cent in the first half of 2006. However, arrears in the sector remained lower than in the wider mortgage arena, where 0.96 per cent of borrowers were three months or more in arrears in the same period.
Michael Coogan, director-general at the CML, said: “The BTL market remains robust, underpinned by strong rental demand. But investors have shown they are quick to adjust to changing market conditions, so the view that interest rates are now more firmly on an upward trend is likely to cause rapid growth of BTL investment to slow in the coming months. Fundamentally, however, the rental market remains sound and looks set to continue to offer good long-term prospects for astute investors.”
Commenting on the findings, Ray Boulger, senior technical manager at John Charcol, said: “The fact that the BTL market has remained strong is hardly surprising, with continued strong rental demand. The plight of the first-time buyer (FTB) is clearly to the benefit of the BTL investor and there is no real sign that this will change in the short-term. In fact, this month’s Base Rate rise and fears of another later this year, is likely to deter some potential FTBs from taking the plunge into the property market.”
