Westexe Mortgage Solutions are Exeter and Devon’s leading Buy to Let brokers and are proud to endorse the popularity of this market sector. We are able to offer mortgages from the whole market and have a thorough understanding of the differences between the lenders and their products.
The latest Trends in Lending report from the Bank of England shows that overall, gross secured lending was higher in 2014 than in recent years and within this, the share of gross lending for buy-to-let purposes has increased.
BTL lending represented 13% of total gross mortgage lending in 2014, with gross advances having recovered from its post-crisis trough – though still below its 2007 peak. BTL mortgages accounted for 15% of the total outstanding value of UK-resident mortgages as at end-2014 Q4.
Gross lending for BTL purposes has grown since 2010, reflecting both supply and demand factors, and was £27.4 billion in 2014.
Over the past five years the share of total BTL lending in overall mortgage lending has picked up to 15% in 2014 Q4, higher than in the pre-crisis period, according to data from the CML. Data from the Bank of England and FCA also show that gross BTL lending grew faster than overall gross mortgage lending in recent years. Contacts of the Bank’s network of Agents noted that the rental market had continued to grow strongly in recent months, supporting continued steady growth in buy-to-let activity.
Gross buy-to-let advances for remortgaging have also increased in recent years. Its share of the total grew from 32% in 2002 to 52% in 2014, with the share of gross advances for house purchase at 45%.
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Overall mortgage approvals also rose slightly in the three months to February compared to the previous period. Approvals for remortgaging rose slightly, and the stock of secured lending to households increased, but the pace of growth has slowed since 2014 H1.
Quoted fixed mortgage rates, which are indicators of the rate offered to borrowers, fell in 2015 Q1 compared to the previous quarter. Lower rates on 75% loan to value fixed-rate mortgages reflected falls in swap rates – spreads were little changed.
However quoted fixed rates on 95% LTV mortgages fell more sharply and spreads narrowed. In recent discussions, some major UK lenders noted increased competition for higher LTV mortgage business.
Jonathan Harris, director of mortgage broker Anderson Harris, commented:
“Mortgage approvals continue their moderate rise, as the mainstream market remains largely unaffected by the uncertainty created by the general election while the upper end of the market takes a pause.
“With the Bank of England uncertain as to when interest rates will rise, what chance do mere borrowers have? The vast majority are opting for fixed rates to give them some certainty and with lenders reducing those further in recent weeks, we are seeing the cheapest deals in a generation.
“Buy-to-let is the real lending success story, seeing a huge improvement in terms of deals available, rates and relaxing of criteria since the downturn. While lenders abandoned the market in their droves after the onset of the financial crisis, they are well and truly back, and with pension freedoms introduced this month, many are sensing further opportunities.”
Courtesy of Financial Adviser