Bank confirms 29 per cent yearly rise in buy-to-let lending

Landlord rent guarantee policyholders will be pleased to read yet more evidence of a burgeoning buy-to-let market, with the Bank of England releasing data showing a significant rise over the last year in mortgage lending to landlords, Advanced Rent (http://www.advancedrent.co.uk) can report. The increase in lending was, in fact, on a par with that to first-time buyers, with the second quarter of the year seeing total lending to landlords amounting to £5bn, a 29 per cent rise from the £3.9bn recorded a year earlier.

Such a figure compares to an annual rise in first-time borrower lending of about 30 per cent, from £6.1bn to £8bn. The Bank declared the lending figures from April to June to have broken records across "a number of metrics", as overall lending over the quarter rose by 23 per cent compared to the previous quarter - a rate of growth described by the Bank as "the highest in any year since the series began in 2007." But as encouraging news as a more active property market is to those contemplating a rent indemnity product, they will doubtless have greatest interest in the landlord lending statistics - as well as a continued general decline in interest rates.

Although a fall was recorded for all rates, fixed rate mortgages saw the steepest decline. Four in five new mortgages are presently fixed rate deals, as borrowers seek protection against future rises in rates. Average rates on all new loans taken dropped from the first quarter's 3.65 per cent to 3.47 per cent with the arrival of the summer. There was a slight decrease in the overall average interest rate across all mortgages, from 3.47 per cent to 3.43 per cent - all positive reading for landlords considering a product like Advanced Rent's Rent Guaranteed to further cement their financial security.

Indeed, there was further good news for landlord rent insurance policyholders lately from the Council of Mortgage Lenders, which released figures showing an 11 per cent monthly rise in buy-to-let lending in July. £2bn was advanced to landlords by lenders in July, compared to the £1.8bn advanced in June. It meant that the number of buy-to-let loans reached 15,200 during the month. There was a 7 per cent rise over the month in lending for buy-to-let house purchases, meaning that the total for loans advanced for purchases was now 7,600. The £900m value of these loans represented a 13 per cent improvement on June.

However, for all of the positivity in these latest figures, there was also a warning for rent guarantee scheme policyholders from Shawbrook Bank's managing director of commercial mortgages, Stephen Johnson, who urged those looking to buy properties to take a long-term approach. He said that investors required a portfolio that would continue to make sense in a more normalised interest rate environment, stating that their hard-earned equity could be put at risk by over-gearing. Ask Advanced Rent (http://www.advancedrent.co.uk) about how our products can help to minimise your financial worries as a landlord.

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.