In Q1 2012 we saw a 32% annual rise in the value of buy-to-let loans, from £2.8bn to £3.7bn, compared with Q1 2011. But despite this growth, buy-to-let lending is still running at only about a third of its peak before the credit crunch.
This market is recovering from a low trough, rather than experiencing runaway growth in the way that some headlines may imply. The maximum average LTV offered on buy-to-let mortgages has remained static at 75% since the start of 2009.
The figures do show, however, that compared with Q4 2011, lending has fallen 5% from £3.9bn. This is the second consecutive quarter in which lending is lower than in the preceding three months.
Whether or not this is the start of a trend is too early to tell, but it is notable that the drop in buy-to-let purchase loans has been more pronounced this quarter.
There may have been some displacement of business to first-time buyers, due to the rush to beat the expiry of the Stamp Duty holiday in March.
In 2011, every time we reported that the buy-to-let figures showed quarterly growth, commentators suggested landlords were crowding out first-time buyers.
But don’t hold your breath for them to concede that, for once, it may be that first-time buyers have crowded out landlords.