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First Time Buyer Mortgages Outnumber Buy-to-Let Loans by Three to One
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Despite an increase in buy-to-let lending last year, first time buyer mortgages outnumbered landlord loans by three to one, according to data from the Council of Mortgage Lenders (CML).
First Time Buyer Mortgages Outnumber Buy-to-Let Loans by Three to One
In 2015, 311,700 mortgages were approved for first time buyers. Although this figure is the same as 2014’s number, the amount borrowed, £46.7 billion, was the highest since 2007.
Home movers took out 365,800 mortgages for house purchase, down slightly on 2014 (0.2%). However, the amount was up, at £72.1 billion – again, the highest since 2007.
Buy-to-let mortgages increased by both volume, by 28%, and by value, up 39%, which was also the highest recorded since 2007.
Just 41% of buy-to-let loans were for house purchase, amounting to £15.6 billion.
The Managing Director of Paragon Mortgages, John Heron, comments on the data: “A common accusation levelled at buy-to-let landlords is that they have an unfair advantage over homebuyers.
“The data would suggest this is not the case, with buy-to-let purchases making up only 11.6% of all purchases.
“First time buyers accounted for three times as many transactions as buy-to-let purchasers.”1
While this may sound like good news for generation rent, since the start of this year, buy-to-let landlords have been flooding into the property market in a bid to beat the 1st April deadline for an increase in Stamp Duty. The figures for the first half of 2016 are likely to be very different.
Separate data from the Office for National Statistics (ONS) found that the average house prices across the UK ended last year at £301,000 in England, £175,000 in Wales, £193,000 in Scotland and £148,000 in Northern Ireland.
The highest average property price in England was unsurprisingly in London, at £536,000, and the lowest was in the North East, at £155,000.
The ONS reports that annual house price inflation was 7.3% in England in 2015, 1% in Wales, -0.2% in Scotland and 1.5% in Northern Ireland.
1 http://www.mortgageintroducer.com/cml-data-proves-buy-to-let-isnt-out-of-hand/#.VsQ7o1tLH8s
