Buy-to-let lending gets £500m boost over past year

In a sign that buy-to-let lending is in increasingly good health despite the Government’s recent policy focus on help for first-time buyers, the Council of Mortgage Lenders (CML) has confirmed a £500m, or 13.5% increase in buy-to-let lending in the first quarter of this year, compared to the same period in 2012. Such news should encourage many of those considering taking out a rent indemnity policy, says Advanced Rent (http://www.advancedrent.co.uk).

The CML confirmed that landlords were given 33,500 mortgages worth £4.2bn by its members in the period from January to March 2013, a notable increase on the £3.7bn that was recorded in the first three months of last year. Buy-to-let deals also occupied a greater proportion of the mortgage market, now accounting for 13.4% of total outstanding lending, compared to the 13% seen in 2012’s final quarter and the 12.9% recorded at the end of the first quarter of last year – more good news for those with an interest in a rent guarantee scheme.

According to the Council, the UK now has some 1.46m buy-to-let loans, which is triple the figure of a decade ago. Buy-to-let lending in the first quarter did come slightly short of the last quarter of 2012’s £4.6bn figure, but otherwise, the trend is of a long-term rise. This is despite Government initiatives aimed at reviving the property market, like the Help to Buy scheme, specifically excluding buy-to-let landlords, with the exception of the Funding for Lending scheme of the Bank of England, for which an extension was recently announced until January 2015.

With rents across the United Kingdom recently increasing at a rate double that of wage increases, with returns of 10.9% a year now being predicted for landlords by property firm LSL, obvious opportunities now exist for investment. However, the fact that one in 11 tenants is now in arrears also highlights the important role that can be played by products like Advanced Rent’s own Rent Guaranteed scheme in shoring up buy-to-let investors’ financial security.

More and more landlords are noticing the returns on offer from buy-to-let, which is fuelling the sector’s present mini-resurgence. For all of the Government’s efforts, there remain a meagre number of first-time buyers, which is leaving the rental sector with plenty of excess demand and ensuring that buy-to-let investors continue to benefit from healthy yields. With rates and fees both down and landlords gaining more options for the financing of more complex deals, those with a landlord rent insurance policy are making the most of the chance to expand their portfolios.

Such movements are increasingly possible, too, for those who use the Rent In Advance and Rent Guaranteed products of Advanced Rent (http://www.advancedrent.co.uk), with the often vital financial breathing space that they provide. Contact the firm now, on 01603 821030, for a more detailed discussion on its rent factoring expertise.