Buy-To-Let Mortgage Completions Drop Significantly

There has been a significant drop in landlords completing on mortgages to buy rental properties during April 2016 according to information from the Council of Mortgage Lenders (CML). This may be due to the change in stamp duty that came into effect in April.

In April 2016, there was a fall in the number of buy to let completions on new purchases.
A reduction was seen in the number of buy-to-let mortgages being completed on in respect of new purchases in April 2016.

In April 2016, there were 4,200 buy-to-let mortgages completed in respect of new purchases. In the previous month of March there were 28,700 such completions so April saw a drop of 85.4%. Back in April 2015 there were 8,600 such completions so, when comparing a 12-month period there has been a fall of 51.2%.

If you look at the figures for buy-to-let remortgages you will find that there were 11,700 completions in April 2016 whereas in March 2016 there were 15,800 such completions – a drop of 25.9%. Back in April 2015 there were 9,100 such completions so there has been an increase of 28.6% over a 12-month period. No doubt many landlords were taking advantage of some attractive buy-to-let remortgage deals offered by lenders.

When looking at the data for the amounts landlords have borrowed, you will see that buy-to-let loans for new purchases totalled £600 million in April 2016 compared to £4.3 billion in March 2016 – a drop of 86%. In April 2015, the amount advanced for such properties came to £1.2 billion so there has been a drop of 50% in the 12-month period. With regard to the amount lent for buy-to-let remortgages, the figure for April 2016 was £1.9 billion – a drop of 29.6% when compared with March 2016’s figure of £2.7 billion. In April 2015, the figure was £1.5 billion so there has been an increase of 26.7% in the last 12 months.

It is going to be interesting to observe what happens in the buy-to-let lending sector in the next few months. Will we see more landlords submit requests for such finance towards the purchase of second homes or will we see a further reduction in the numbers of such mortgages being requested? We will keep you updated.

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