View more on these topics

North / South divide is dead in buy-to-let market

Half of all buy-to-let lending now takes place away from the South of England, latest research from ARLA reveals.

The Midlands, the North and Scotland and Wales accounted for 49.9% of all lending to buy-to-let investors in the three months to the end of September.

The average number of loans arranged each month increased by 37.8% against the previous three months to the end of June, while the average monthly value of the lending was up by 43.1%, an unusual result for the high summer months.

But for individual loans, the increase only equated to an average increase of 3.8%, a rise in the national average loan from £95,800 to £99,500.

These figures are revealed in the quarterly Survey of Lending Trends in the buy-to-let market issued by the Association of Residential Letting Agents on behalf of the ARLA panel of mortgage lenders.

Robert Jordan, ARLA president, says: “These trend figures show clearly that the North/South divide is no more so far as investment in residential property is concerned. This must be partly as a result of the exciting residential developments in cities like Birmingham, Leeds, Liverpool, Manchester and Newcastle.

“These have helped to re-establish renting as socially acceptable across all income groups. Also, there is no doubt that there is latent tenant demand for good quality property right across the country.”

The latest ARLA Trends Survey shows a sharp increase in both the numbers and amounts of buy-to-let loans executed in all regions. With a 55% increase, the North East was pipped at the post by less than half a percent for the region, with the biggest increase in the average monthly amount lent.

The South West saw the highest average monthly increase in the amount lent, with a rise of 55.4%.

The lowest increase in the amount lent was experienced in central London, outside the prime areas. With a rise of the total value of buy-to-let loans of only 31.1%, central London trailed behind Scotland and Wales, where the overall value of loans arranged increased by 35.2%.

However, unsurprisingly, Prime London and the rest of central London maintained their position for the largest individual loan amounts. New buy-to-let mortgages in Prime London averaged £310,500. The rest of central London averaged a more modest £161,500.

The smallest buy-to-let loans were still being arranged away from the South of England. The Midlands averaged loans of £79,300, the North West £68.200 and the North East £65,100. Scotland, Wales and Northern Ireland saw a marginal drop in average loan amounts of 0.1%, from £67,000 to £66,900.

The Survey of buy-to-let trends for the ARLA panel of mortgage lenders showed tracker mortgages to be the most popular interest rate type in all areas of the country. Tracker mortgages accounted for at least three quarters of all buy-to-let mortgages in the North and Scotland and Wales and for more than two thirds of all Buy to Let mortgages over the rest of the country. Standard Variable Rate Mortgages struggled at just 4% of the total.

Recommended

Solent Mortgage Services appointed to MGM Home Finance panel

Solent Mortgage Services has been appointed as one of two non-conforming distributors to the introducer panel of MGM Home Finance. MGM Assurance has recently launched MGM Home Finance as a mortgage service provider for brokers seeking appointed representative status. By installing SMS as one of four outsourced mortgage desks, MGM Home Finance will gain access […]

Just 6% of FTBs understand mortgages, says MCCB

Only 6% of first-time buyers have a good understanding of mortgages, research from the Mortgage Code Compliance Board has revealed. With just a year before the FSA takes over the regulation of mortgages, the MCCB says the research highlights the importance of high quality mortgage advice to consumers. Conducted from a sample of FTBs, it […]

You can make it

The self-build market now accounts for one in four detached properties built in the UK – more than are being built by any housebuilding company. Some 20,000 self-builds and renovations are completed each year. In comparison Persimmon built just 12,051 in 2001, Wimpey built 11,537 and Barratt built 5,498. The vast majority of self-build properties […]

Quest to showcase reappraisal system at Expo

Quest Associates will be previewing its new Computer Assisted Reappraisal solution at this year&#39s Mortgage Business Expo. The CAR system speeds up reappraisals four-fold by providing the original surveyor with the essential data required to complete a mortgage valuation, without the need for a property inspection. It has been specifically designed so the original surveyor […]

Newsletter

News and expert analysis straight to your inbox

Sign up