Buy-to-let activity was strong in Q1
Buy-to-let house purchases increased by 7% in Q1 2020 year-on-year, UK Finance figures show.
Contrastingly first-time buyer numbers fell – resulting in overall mortgage lending being flat year-on-year.
John Goodall, chief executive at Landbay, said: “Buy-to-let started the year really strongly and this is reflected in the UK Finance figures.
“January and February saw really strong demand for new purchases.; UK Finance shows a 7% year-on-year increase, but what we saw was significantly in excess of that.
“While the Coronavirus lockdown from mid-March has hampered this, there is still a notable demand from landlords and investors.
“What these figures don’t show is the effect of payment holidays. While there is demand, borrowers who are trying to take out new mortgages whilst also taking payment holidays on existing parts of their portfolio may find it harder to buy than they did before.
“While there is no chance that we will jump straight back to the numbers we saw at the start of the year, as soon as confidence returns the market should also return to normal, although I don’t expect a ‘V’ shaped recovery, but a longer, more gradual increase.”
Eric Leenders, managing director of personal finance at UK Finance, said: “Following a subdued year in the mortgage market in 2019, any signs we might have seen of improving confidence translating into increased homemover activity at the turn of this year have currently been overtaken by the impact of the Covid-19 pandemic.
“This review does not capture the various support measures to households that the industry has enacted, such as three-month payment holidays and a repossession moratorium.
“By mid-May approximately 1.8 million mortgage payment deferrals had been arranged for customers.
“Similar payment holidays for personal loans and credit cards were introduced at the end of March and will be reviewed in depth in our next household finance review.”