Industry figures have shown a major rise in the rate of buy-to-let lending, with loans to landlords reaching a five-year high.
The Council of Mortgage Lenders (CML) data has revealed that £5.1 billion was lent to landlords in the quarter to the end of June this year, representing a rise of 21 per cent on the previous quarter.
While overall lending to landlords remains well below the all-time high of £12.7 billion at the beginning of 2007, Bank of England Governor Mark Carney’s indication that interest rates will remain low until 2016 at least, is set to fuel further growth.
The CML confirmed that buy-to-let loans now make up 13 per cent of gross lending across the country, and mortgage costs for landlords are set to become ever more attractive. Weak returns on other assets are also a key factor behind the rise in buy-to-let activity, the body reported.
Head of policy at the CML, Jackie Bennett, commented: “Strong rental demand is contributing to the continuing expansion of the buy-to-let sector, but growth is also being helped by improved conditions in funding markets and more widespread availability of mortgages. These conditions are creating more opportunities for landlords to remortgage.”