According to figures from the Council of Mortgage Lenders, buy-to-let continues to grow year-on-year, mainly driven by buy-to-let remortgage activity.
Buy-to-let lending for house purchase has showed stronger growth than home-owner loans for house purchase for most of the year, which in part a market recovery response buy-to-let lending declined more than home-owner loans during the downturn. While loans to home-owners for house purchase declined by 50% in volume terms from 2007 to 2009, BTL loans for house purchase declined 71% in the same period. Buy-to-let represented 18% of gross lending in July.
Overall, buy-to-let lending rose sharply in July, increasing both month-on-month and year-on-year by volume and by value for the third consecutive month in a row. While buy-to-let house purchase rose significantly, these increases are driven more by strong buy-to-let remortgage activity since the beginning of the year.
Paul Smee, director general of the CML, commented:
The market has shown steady growth in house purchase and buy-to-let over the past few months with general improvements in economic factors across the UK allowing for more people to enter the property market. This positive direction of travel going into the autumn months reinforces our recent revised forecasts that lending levels should continue to grow gradually over the rest of the year after a subdued beginning of the year.