According to The Guardian , Council of Mortgage Lenders reports a near-50% increase in the number of buy-to-let loans taken out, with first-time buyer mortgages up by 11%.

Lending to buy-to-let investors rose by almost two-thirds in the 12 months to February, as some landlords took advantage of low interest rates to remortgage, while others added to their portfolios ahead of changes to stamp duty rates.

Council of Mortgage Lenders (CML) figures showed that 23,700 buy-to-let loans worth £3.7bn were taken out during the month, a 47% increase in volume on the previous February and a 61% rise in value.

The key driver was remortgaging, with borrowers taking advantage of low rates to refinance their portfolios. Of the total, 13,100 mortgages worth £2.2bn were remortgages.

The changes to stamp duty on second homes, which came into force on 1 April, also boosted buying activity by investors in the early part of the year. The CML said the number of house purchase loans for buy-to-let was up by 30% year-on-year, at 10,300.

The CML’s figures also show strong year-on-year growth in house purchasing by first-time buyers, with the value of loans hitting £3.4bn – 21% up on February 2015’s figure.

The number of first-time buyer mortgages was up by 11% year-on-year, at 22,000.

First-time buyers typically borrowed 83% of the value of the property they were buying, and spent 18.1% of their gross monthly income on mortgage repayments.

The monthly cost of servicing a loan was down from 18.9% in February 2015, as mortgage rates continued to fall. However, the rising cost of homes meant new buyers were borrowing more relative to their incomes, with the average loan worth 3.46 times earnings, compared with 3.33 in February 2015.


Source:   13/04/2016