CML: Landlords expanding portfolios to meet rising demand
Posted by Lucy Wooldridge
New figures from the Council of Mortgage Lenders (CML) suggests that landlords are increasing their levels of UK property investment.
The organisation has reported that, in the third quarter of the year, the number of new buy-to-let loans increased by 16 per cent compared to the preceding quarter, reaching a total of 34,500.
Of these, 18,580 loans for the purchase of buy-to-let properties, accounting for almost 12 per cent of all house purchase loans.
According to the CML, a boom in demand from tenants is the likely driving force behind landlords' desire for investing in new properties.
"With tenant demand remaining strong in the rental sector, some existing buy-to-let landlords have been expanding their portfolios and the growth that returned to the sector in the preceding quarter has continued," said CML director-general Paul Smee.
Meanwhile, the value of lending totalled £3.8 billion during the quarter, up from £3.2 billion and the highest level since the final quarter of 2008.
However, there is still significant scope for this figure to rise over the coming months.
"The recovery of buy-to-let from its low point in 2009 has helped improve supply and choice in the rental market. Despite recent improvements, however, buy-to-let lending volumes are still only around one-third of their former peaks," explained Mr Smee.
Commenting on the news, Nigel Terrington, chief executive of buy-to-let lender Paragon, said that high remortgaging figures also suggested landlords are making new property investments.
"You would not expect such high levels of remortgaging activity given the benign and low interest rate environment ... which suggests that landlords are releasing equity in their existing properties to fund new house purchases," he said.
"In addition, our experience is that landlords are using their own cash and short-term borrowing to purchase and renovate property and then remortgaging using buy-to-let finance."
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