Relatively stable buy to let mortgage lending

July 22, 2012

Landlord Information

The latest quarterly figures for mortgage lending relating to buy to let businesses shows relative stability over the last 12 months or so.

The individual detailed figures are interesting* but it is difficult to draw any macro level conclusions from them.

What is clear is that such lending appears to have fallen by two-thirds since 2007 and increases, where they exist, between 2010 and 2012 appear to be minor.

Landlords and potential landlords probably don’t need these sorts of tables in order to conclude that their economic situation remains tough and the future uncertain. While increased funds do seem to be trickling through, things such as a maximum loan to value of 75 percent being the standard, hardly inspires business confidence.

There have also now been several major tranches of liquidity injected into the banking system as part of the Bank of England’s quantitative easing programme but the marginal lending increases in these and other figures will continue to generate questions in the minds of business people, as to just where these billions are going.

In theory, 2012 with the Jubilee and the Olympics was supposed to be a year which would see the feel-good factor helping to drive UK business confidence and a business revival – particularly in the buy to let marketplace.

Unfortunately, these figures do not seem to support any particularly positive interpretation and they may struggle to give cause to believe that the worst of the economic stagnation of the past five years is over.

The very small and modest improvements shown in these figures are welcome but for the time being it appears as though many landlords will need to continue to batten down the hatches and look to control their costs through seeking better utility supply deals and a more cost-effective landlords insurance quote etc.

For many landlords, an increase in the money supply from the banks coupled with an easing of the LTV criteria is what is required to inject some dynamism into their market and business.

Being realistic, at the moment such changes seem unlikely and not even on the radar, however, we can only hope that they come along before too long.




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