23/02/2009 - Sharp fall in buy-to-let lending
New figures have revealed a 65% drop in the value of mortgage lending on buy-to-let properties during the past year.
Investment landlords took out about 37,000 new mortgages during the final quarter of the year - a 56% drop compared with the same period in 2007. When calculated by value, the mortgages were collectively worth £3.9 billion - a 65% fall.
Quarterly buy-to-let data began being gathered by the Council of Mortgage Lenders in 2006, but it said that on the basis of its half-yearly figures, lending in the sector was almost certainly the lowest since 2003.
A doubling in the number of buy-to-let properties that were repossessed last year was also reported by the group, with 4,000 properties taken over by mortgage lenders during 2008, up from 2,000 in 2007. Of the 40,000 properties repossessed across all lending last year, one in 10 were buy-to-let residences.
The buy-to-let sector has been hit hard by the credit crunch, with many lenders pulling out of the market altogether, while others are demanding bigger deposits and charging higher rates.
In July 2007, just before the credit crunch first struck, there were 3,478 different buy-to-let loans available. Now there are just 245.
Copyright © Press Association 2009
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