Buy to let lending is well down according to data from the Council of Mortgage Lenders.
Apparently contrary to an optimistic report from Rightmove yesterday the CML reports that landlords borrowed only £3 billion in August, representing an annual decrease of 12 per cent. Gross buy to let lending remained substantially down on year earlier levels, and nearly two thirds of buy-to-let loans were remortgages rather than house purchase.
"Buy to let continues to operate at lower levels five months after the stamp duty change on second properties. This appears to be a long-term trend and with lenders potentially tightening affordability checks ahead of the tax changes in April 2017, activity on the buy to let house purchase side may well remain at current levels," says Paul Smee, director general of the CML.
Meanwhile, borrowing for owner occupier purchases hit £12.2 billion in August. Buyers took out 66,000 loans - up 13 per cent on July and 24 per cent on August last year.
"House purchase activity bounced back from a dip in July, reflecting resilience in first time buyer activity. Mortgage rates remain at or close to historic lows, and the re-pricing of mortgages following August's base rate cut should help to underpin a continuing, strong appetite for home-ownership over the coming months," says Smee.
First time buyers in August borrowed £5.1 billion, up 12 per cent month-on-month and 19 per cent year-on-year.
"The buy to let market continues to be subdued, with landlords looking to consolidate existing portfolios and perhaps incorporate rather than necessarily adding to them. It is unlikely that the changes to mortgage interest tax relief are a fatal body blow for the sector but it will make people think twice before investing, which is no bad thing," suggests Mark Harris, chief executive of mortgage broker SPF Private Clients.
Article courtesy of Letting Agent Today | Sign up for Letting Agent Today newsletter | Get this news on YOUR site!