The buy-to-let (BTL) mortgage sector has continued to grow in the first quarter of 2013.
Between January and March more than 33,500 mortgages were taken out – an increase of £500 million from the first quarter of 2012.
Lending in the BTL sector represented 13.4 per cent of all the UK’s outstanding mortgages and is expected to increase in the coming years with landlords adding to their portfolios as letting costs rise.
Brian Murphy, head of lending for the Mortgage Advice Bureau, argued poor savings rates were behind the increase in BTLs, with many investors believing the sector offers a greater return-on-investment than cash ISAs or building society saving accounts.
David Whittaker, managing director of Mortgages for Business, said: “The economy may be firing blanks but the BTL market is going great guns. High yields, stagnant property prices and improved financing options are encouraging investors to add to their portfolios.”
The Bank of England yesterday (May 15th) predicted the UK would return to sustained, moderate economic growth over the coming years.
If the bank’s forecast is correct, house prices are expected to stabilise or increase, rather than fall as they have throughout the recession.
