Buy-to-let lending in Q1 was down from the £3bn of lending across 28,600 loans in the Q4 2010, but up on the £2.1bn of lending and 22,000 loans in the first quarter a year ago.
The total outstanding number of buy-to-let loans rose from 1,305,000 at the end of 2010 to 1,313,200 at the end of the March 2011, with a rise in the outstanding value of buy-to-let lending from £151.5bn to £152bn.
Buy-to-let lending accounted for 12.3% of total outstanding mortgage lending by value, and 11.6% of mortgages by number.
Lending criteria and characteristics saw minimal change with the average maximum loan-to-value ratio remaining at 75% and the average minimum rental cover requirement at 125%.
The CML data also showed that at the end of March, the three month arrears rate stood at 1.62% on buy-to-let loans where no receiver of rent was in place, and 2.24% on buy-to-let loans if receiver of rent cases were included.
This compared with a three month arrears rate of 2.15% in the owner-occupier sector.
The repossession rate on buy-to-let mortgages remained higher than in the mainstream market with 0.13% of buy-to-let loans subject to repossession in Q1, compared with 0.07% of owner-occupied loans.
Michael Coogan, CML director general, said: “Demand for rental property remains strong, and as more funding becomes available we would expect to see buy-to-let lending increasing.
“The performance of buy-to-let loans is also holding up well, and the differential between arrears rates in the buy-to-let sector and the owner-occupier sector has narrowed substantially so that there is now only a modest difference between them.”
David Whittaker, managing director of brokerage Mortgages For Business, added: “The owner-occupier and buy-to-let mortgage markets are in much the same situation as Kate and Pippa Middleton on the big day last month. All the attention maybe focused on one of them, but in reality, the junior sibling is quietly stealing the show.
“As house prices flatline, the BTL market still provides excellent opportunities for investors and professional landlords. With rental demand likely to remain strong for the rest of the year, these opportunities will continue to be available.”
