This was 5% down on the fourth quarter of 2011. While 32% higher than in the first quarter of 2011, buy to let lending is still only around a third of its 2007 levels.
Buy to let lending for house purchase in the first quarter fell by a greater amount, 9%, than remortgaging at 1%, but both were around 30% higher than in the first quarter of 2011.
The buy to let sector continues to increase its share of the mortgage market, with buy to let mortgages representing an estimated 12.8% of the total value of outstanding mortgages at the end of the first quarter, up from 12.6% at the end of 2011 and 12.2% at the end of the first quarter of 2011. The total number of buy to let mortgages stands at just over 1.4 million, with a total value of £159.4 billion.
The average maximum loan to value available from lenders on buy to let mortgages remained at 75% in the first quarter of the year, with the average minimum rental cover 125%, up from 123% in the previous quarter, but otherwise the same as for nearly three years.
In terms of loan performance, the number of buy to let mortgages in arrears fell a little in the first quarter of 2012, and the arrears rate on buy to let mortgages continues to be lower than in the owner occupied sector.
At the end of the first quarter, around 1.7% of buy to let mortgages were in arrears of more than three months, including cases where a receiver of rent has been appointed compared with around 2% of owner occupier mortgages.
The repossession rate was 0.12%, virtually the same as for the last five quarters, compared with 0.08% in the owner occupied sector. The CML said that it is not surprising that the buy to let repossession rate is higher than in the owner occupier sector, where the focus is on forbearance and trying to keep home owners in their homes. In the rented sector, expired tenancies allow repossession to be undertaken without unexpected disruption to tenant households. In absolute terms, the number of buy to let repossessions remains only a small proportion of total repossessions.
‘Even though buy to let lending is running at only around a third of its peak levels, the sector is continuing its gradual expansion. It has become an important part of the overall landscape of housing provision in the UK,’ said CML director general Paul Smee.
Overall the number of repossessions in the first quarter of 2012 was 9,600, the same as in the first quarter of 2011, breaking the recent trend of year on year increases in repossessions, the data also shows.
Repossessions in the first quarter were higher than the 8,700 that took place in the fourth quarter of 2011, but this represents a normal seasonal pattern. Overall, the repossessions landscape appears stable for the time being.
The 45,000 central forecast for repossessions in 2012 may be revised down when the CML publishes revised housing market forecasts later in the summer. However, continuing pressures on household finances, changes to welfare benefits, and an upward drift in mortgage rates all have the potential to disrupt the current stable picture.
‘Combined efforts by borrowers, lenders and money advisers are ensuring that payment difficulties are being managed effectively, with the result that the number of repossessions remains relatively low. Repossession really is a last resort, as the numbers show. Anyone worried about their mortgage should be assured that lenders will try to help them get back on track, as long as this is a realistic prospect,’ said Smee.
