Buy-to-let lending has risen to its highest level since the third quarter of 2008, as landlords continue to benefit from strong tenant demand.
A total of 40,000 buy-to-let mortgages were advanced by UK lenders in the three months to June, worth £5.1bn, according to data published on Thursday by the Council of Mortgage Lenders.
This was up 19 per cent from the 33,500 in the first quarter of the year.
The latest figures show that buy-to-let lending has now topped £5bn in value, the highest amount since the downturn.
However, lending remains much lower than at the peak of the housing market in the third quarter of 2007 when more than 93,000 buy-to-let mortgages were advanced, worth £12.7bn.
Jackie Bennett, head of policy at the CML, said buy-to-let growth has been helped by cheaper mortgage rates and strong rental demand. “These conditions are creating more opportunities for landlords to remortgage, as well as helping to fund increased activity in the mortgage market more generally,” Ms Bennett said.
The government’s Funding for Lending Scheme has helped lower the cost of borrowing for landlords in recent months.
Lending for buy-to-let purchases accounted for around half of the loans, a rise of 15 per cent from the previous quarter. However, the growth in remortgaging was stronger, up 24 per cent.
Buy-to-let loans now account for 13.3 per cent of all UK lending, up from 12.9 per cent a year ago, the CML said.
The number of landlord mortgages in arrears of over three months rose slightly, however, from 8.3 per cent to 8.4 per cent of all mortgages. This is down from 9.7 per cent a year ago.
Separate figures, also published by the CML on Thursday, show the number of residential repossessions fell 4 per cent to 7,700 in the second quarter of the year, equivalent to 0.07 per cent of all mortgages.
The number of mortgages in arrears of 2.5 per cent or more of the balance also saw a decline from 159,700 to 157,700 in the three months to June. This was the lowest number recorded since the third quarter of 2008.