Buy-to-let remains robust

In response to the CML’s data on the Buy-to-Let market, Peter Williams, Executive Director of IMLA, comments: "These figures indicate that the buy-to-let market remains buoyant, topping the one million mark in terms of loans outstanding, around 5% more than a year earlier. Landlords have responded to growing demand for rented accommodation by increasing the size of their investment portfolios over the year, and intermediary lenders in particular have supported this purchasing activity through the provision of specialist buy-to-let mortgage loans – buy-to-let is dominated by intermediary lenders who provide around 95% of loans. There was a slight cooling of activity towards year end, as the repercussions of the credit crunch were felt, but even so Q4 was stronger than Q2 in terms of lending volumes.”

“Credit quality has also proved resilient. A rise in arrears and in possessions was fully expected (and had been flagged up by IMLA member surveys), but even with these increases both indicators remain significantly lower than for the mortgage market as a whole. For example, arrears on buy-to-let are around two-thirds of the level of the market generally and properties taken into possession were significantly lower."

“IMLA members continue to believe that the buy-to-let market will remain well underpinned in 2008 and expect further growth this year. Some further deterioration in credit quality is possible, but the vast majority of landlords will continue to be able to service their borrowings. Indeed, they believe the combination of a slower housing market and rising in tenant demand represents a good opportunity for them to buy additional investment properties on a selective basis.”