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News: Buy-to-let lending down 9% year-on-year

Wed, 18 Jan 17

There was a significant up-tick in the amount buy-to-let landlords borrowed to invest in property  in November but the new figures from the Council of Mortgage Lenders show that overall lending in the sector was down 9% compared to Nov 2015. Landlords may have been seeking to pre-empt the introduction of new affordability tests brought in at the start of this month, ahead of changes to tax relief from April this year.

Landlords borrowed £3.2bn in November 2016, up 10% month-on-month, but down 9% year-on-year, the Council of Mortgage Lenders (CML) said.  

In total, 21,000 buy-to-let loans were issued in total, up 13% compared to October but down 10% compared to November 2015.

Gross buy-to-let lending in November was the highest monthly level since the stamp duty changes on second properties introduced last April. Over two thirds of buy-to-let loans were re-mortgages rather than house purchase.

“Buy-to-let lending, driven by re-mortgage activity, saw its strongest monthly lending level since the stamp duty changes on second properties introduced last April,” said Paul Smee, director general of the CML.

“Despite the recent increase in buy-to-let lending, the CML predict that lending levels will slow, owed in part to changes to the existing rules that permit landlords to offset all of their mortgage interest against tax from April 2017.

“We expect buy-to-let lending levels in both 2016 and 2017 to prove lower than their 2015 recent peak as further tax changes take effect,” Smee added. 

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