Data released today by the Council of Mortgage Lenders (CML) shows lending to first-time buyers continues to outnumber buy-to-let purchases by three to one.
Lending to buy-to-let investors in 2015 totalled £37.9 billion, however, in 2015 only 41% of buy-to-let mortgages were for house purchase, a total value of £15.6 billion.
Compared with first-time buyer activity, which is back to pre-crisis levels, loans for purchases totalled £46.7 billion – the highest level of activity since 2007.
John Heron, Director of Paragon Mortgages, said...
A common accusation levelled at buy-to-let landlords is that they have an unfair advantage over home-buyers. The data released today would suggest this is not the case, with buy-to-let purchases making up only 11.6% of all purchases. First-time buyers accounted for three times as many transactions as buy-to-let purchasers. Total lending for buy-to-let whilst up 28% by volume on 2014, remains lower than it was in 2006, with remortgages accounting for 58% of all lending. In 2015 lending for new purchases was only marginally higher than it was in 2003. The information from the CML also indicates strong credit quality in buy-to-let lending, with average loan to values moving lower, affordability strengthening and arrears at the lowest levels since before the financial crisis. Despite claims of over-heating, effectively the sector is still recovering from the financial crisis and if we could draw the attention of Government and policy makers to any one argument this would be it.