Buy-to-let contributes to 16% rise in lending
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A 16% rise in gross mortgage lending in June has been attributed to a boost in buy-to-let activity.
Data from the Council of Mortgage Lenders released last week shows gross mortgage lending totalled £12.6bn in June, 16% up on May but 3% down on June 2010.
Bob Pannell, chief economist at the CML, says the uncertain economic climate is weighing negatively on house purchase activity, but buy-to-
et lending is strong.
He says: “Landlord activity seems to have picked up and with evidence of strong rental demand, this should help underpin lending activity over the coming months.”
David Whittaker, managing director at Mortgages For Business, says professional landlords have taken advantage of stagnant house prices and rising rents in recent months.
He says: “The buy-to-let market has been key to underpinning lending in the first half of 2011. Only when owner occupiers are confident of economic conditions and lenders are willing to loosen criteria further will we see a substantial recovery in the overall market.”
The CML data also reveals that gross lending for Q2 was an estimated £33.5bn, an 11% increase on the £30.1bn lent in Q1, but a 3% decrease on Q2 2010. Lending in the first half of the year hit £63.7bn, slightly less than the £64.1bn lent in the first six months of 2010.
Richard Sexton, business development director at e.surv, says June’s increase merely reflects lenders’ desires to meet mid-year lending targets.
He adds: “It would be presumptuous to view this as a sign that lenders have greater capacity to increase lending in the long term.”
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