Loans to buy-to-let investors is 31% higher by value over the year reaching the highest level since 2008.
The Council for Mortgage Lenders (CML) has said buy-to-let mortgage lending is at a high with 40,000 mortgages worth £5.1 billion advanced in the second quarter.
Investors have been quick to benefit from the strong rental demand and low interest rates resulting in a rapidly expanding buy-to-let sector.
Lenders launch new products
Since the credit crunch lenders have restricted the buy-to-let market but with a relaxation in the lending criteria new products are being launched.
Half the mortgages were for new purchases and the remaining for remortgages.
Landlords are more confident with interest rates remaining low and first time buyers unable to find a large enough deposit to become homeowners fuelling the rental market.
With competition and reduced supply of suitability properties for home movers, more remortgage buyers are remaining in their existing home and saving for a bigger deposit.
New buy-to-let products from lenders such as Nationwide Building Society, Lloyds banking Group, Clydesdale Bank and Coventry Building Society are benefiting with looser lending criteria and greater availability of mortgages.
Lower mortgage rates benefit buy-to-let investors as they can remortgage to reduce the cost of interest repayments to lenders.
Bank of England helping with low rates
The Governor of the Bank of England Mark Carney has indicated with forward guidance that interest rates would remain low until at least 2016.
The low interest rates are making investing in property for savers more attractive when compared to poor returns on other assets such as cash are going to continue for two or three years.
In addition for landlords property prices look like they will rise in the future offering the potential for capital growth on their investments.
The recent growth in the buy-to-let mortgage market to £5.1 billion remains substantially below the pre-crisis peak when lending reached an all time high of £12.7 billion in the third quarter of 2007.
The recent growth in the buy-to-let mortgage market to £5.1 billion remains substantially below the pre-crisis peak when lending reached an all time high of £12.7 billion in the third quarter of 2007.
House prices are likely to rise to the benefit of existing homeowners such as remortgage buyers or allowing equity release mortgage buyers to access wealth from their homes improving their quality of life or pay university fees for grandchildren.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage monthly cost calculators, property value tracker chart and equity release calculator.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as home improvements and holidays of a lifetime or even buy a more expensive home.
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