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Q4 2016 figures show that BTL lending has ‘returned to normal’

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According to the latest figures available from Mortgages for Business, buy-to-let (BTL) mortgage lending returned to some form of normality during the final quarter of 2016.

The latest Mortgages for Business’ complex buy-to-let index found that:

  • the share of lending for acquisitions in the BTL market rose by 10% to 38% in Q4;
  • remortgaging continued to account for the majority of buy-to-let activity in Q4;
  • HMO buy-to-let lending increased to 26% (up from 23% in Q3). 

CEO of Mortgages for Business, David Whittaker, said: “It is encouraging to see that the share of lending for purchase in the buy to let mortgage market returned to normal in Q4 2016. 

“Following a notable shift towards lending for remortgaging in the third quarter, landlords showed they were once again willing to commit to new purchases”. 

He said that uncertainty following the Brexit result dampened purchase lending in Q3, with many landlords opting for a more cautious approach, adding: “While changes to stamp duty on second properties and landlords’ tax relief mean that landlords need to approach their investments intelligently, there are still excellent returns to be had in the market – especially compared to other asset classes.”

While the figures suggest that landlords’ confidence in the sector may be up, The Telegraph reported that the number of buy-to-let mortgages available has fallen 5% in the past four weeks, marking it the steepest decline since the banking crisis. The new Prudential Regulatory Authority affordability regulations which came in to affect in January are cited as one reason for the decline.

 

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