The value of lending to buy-to-let property investors increased by 61 percent in the month of February 2016, according to a recent report from the Council of Mortgage Lenders (CML). This figure represents 23,700 buy-to-let loans, with a value of £3.7bn, which is up almost 50 percent on loans issued in February 2015. In total, the CML says that buy-to-let loans are up by 30 percent when year-on-year figures are taken into account.
lending to buy-to-let investors
Total lending to buy-to-let investors was up by around two-thirds for the year as many property speculators re-mortgaged properties as a result of the low-interest rates applicable throughout the year. Other investors were tempted to add to property portfolios prior to the changes to stamp duty legislation which came into effect in April 2016. £2.2bn of the total £3.7bn buy-to-let mortgage lending was due to re-mortgaging, however, the buy-to-let lending market is anticipated to fall dramatically from the second quarter of 2016 onwards.
Purchasing buy-to-let properties
Purchasing buy-to-let properties have been popular with investors in the UK for a number of years now, although the UK Government are making strong attempts to reduce these figures as it is felt that the buy-to-let market could actually cause a collapse in house prices at some time in the future if more stringent controls are not put in place. The Treasury and Bank of England are working across the complex buy-to-let marketplace to review the situation and ensure the UK property market continues its upward trend and does not suffer financial problems of a nature that has already been seen in the financial crisis suffered by the UK and its mortgage lenders over recent years.
rent and buy
First-time Buyer Mortgages Increase by 11 percent for 2016
The CML also reported that the number of first-time buyer mortgages was up by 11 percent for the year. First-time buyers will typically borrow up to 83 percent of the value of their first property and it’s estimated they spend around 18 percent of their gross monthly income on mortgage repayments. Although borrowing costs have dropped in the period, buyers are being forced to borrow an average of 3.46 times annual income, which has increased due to the rising prices of properties throughout the year.
Property Market Forecasts
Although the stamp duty change is forecast to dig deep into the buy-to-let market, alongside other regulatory restrictions possibly due from the Bank of England, the UK property market is buoyant and likely to remain so. First-time buyers may well find it’s easier to get into the property market when they are no longer competing with buy-to-let investors for homes and the rocketing prices of the past year may begin to slow as a reflection of this factor. The average price for starter homes was stated at just over £176,000 across the UK for February, which was an increase of 9.8 percent annually. The mortgage market as a whole is also anticipated to continue its strong growth due to re-mortgaging which is not expected to slow through 2016.
Buy-to-let mortgages
Although buy-to-let mortgages are anticipated to decrease from April 2016, it’s still felt that some property owners may take advantage of re-mortgaging their homes to buy smaller properties for buy-to-let purposes. Some of the higher-rate tax-paying investors will, however, be taking the time to sit back and review their overall investment strategies on property purchases, as it could be the Chancellor will announce further stringent penalties likely to affect some investors. It seems the major winners in the property and mortgage market for 2016 are likely to be first-time buyers, as they help to buy scheme is proving successful across the UK.
Purchasing buy-to-let properties
Purchasing buy-to-let properties have been popular with investors in the UK for a number of years now, although the UK Government are making strong attempts to reduce these figures as it is felt that the buy-to-let market could actually cause a collapse in house prices at some time in the future if more stringent controls are not put in place. The Treasury and Bank of England are working across the complex buy-to-let marketplace to review the situation and ensure the UK property market continues its upward trend and does not suffer financial problems of a nature that has already been seen in the financial crisis suffered by the UK and its mortgage lenders over recent years.
First-time Buyer Mortgages Increase by 11 percent for 2016
The CML also reported that the number of first-time buyer mortgages was up by 11 percent for the year. First-time buyers will typically borrow up to 83 percent of the value of their first property and it’s estimated they spend around 18 percent of their gross monthly income on mortgage repayments. Although borrowing costs have dropped in the period, buyers are being forced to borrow an average of 3.46 times annual income, which has increased due to the rising prices of properties throughout the year.
Property Market Forecasts
Purchasing buy-to-let properties have been popular with investors in the UK for a number of years now, although the UK Government are making strong attempts to reduce these figures as it is felt that the buy-to-let market could actually cause a collapse in house prices at some time in the future if more stringent controls are not put in place. The Treasury and Bank of England are working across the complex buy-to-let marketplace to review the situation and ensure the UK property market continues its upward trend and does not suffer financial problems of a nature that has already been seen in the financial crisis suffered by the UK and its mortgage lenders over recent years.
