The buy-to-let mortgage sector grew in the third quarter of 2009 – the first quarter it has done so in two years, according to the Council of Mortgage Lenders.

Gross lending in the buy-to-let mortgage market grew by 10% over the last three months, to £2.1bn. The third quarter also saw a similar first increase in two years in the number of buy-to-let loans advanced, from 21,600 to 23,700.

Its also figures also revealed that the number of outstanding buy-to-let loans grew to 1,205,000, which is 11% of all mortgages in the UK – the value of outstanding buy-to-let mortgages increased by 2.5% to £144.2bn, according to the mortgage council.

The CML says low borrowing costs are also contributing to a continued improvement in cases of buy-to-let arrears – it found that for the third quarter in a row, there was a decline in the number of buy-to-let mortgages with arrears with just 20,500 landlords in the UK owing more than 1.5% of their overall loan.

Michael Coogan, director general of the CML says: "These figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome."

David Brown, commercial director of LSL Property Services, says: “It’s a great relief for investors that buy-to-let finance is starting to become more available. With numbers of loans increasing for the first time in two years, the buy-to-let mortgage market is returning, a little.

"But it's a slow process – the number of loans is still only a quarter of that in 2007. With all the attention on first-time buyers, we mustn’t forget that landlords and property investors play a crucial role in the housing market – providing accommodation for those who are unable or unwilling to buy."

SOURCE: CML, LSL, 12/11/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

Landlords up and down the country are celebrating this week after a landmark case against Foxtons made excessive letting agent charges illegal.

The judge overturned several clauses in Foxtons' contracts with landlords, including using terms that require a landlord to pay substantial sums in commission, where a tenant continues to occupy the property after the initial fixed period of the tenancy has expired – even if Foxtons plays no part in persuading the tenant to stay, and does not collect the rent or manage the property. Also where it requires a landlord to pay commission to Foxtons even after it had sold the property.

So from now, any letting agent must be completely fair and transparent with any fees, commissions or renewals.

The Office of Fair Trading has said it "expects the letting industry to comply with this ruling, and will take the necessary steps to ensure this where appropriate." It went on to say that "the charging of repeat renewal commission represented a ‘trap' or a ‘timebomb' for consumers."

John Socha, vice chairman of the National Landlords Association says: "This sends a direct message to letting agents that this lack of transparency must stop. Contracts must be clear with provisions which are upfront and ‘plain and intelligible'. This ruling is most definitely a victory for landlords throughout the country."

Keshav Thukaram, managing director of Smartlandlord.co.uk, says: "Charging landlords renewal fees for existing tenancy agreements where the letting agent plays no part in persuading the tenant to stay, collecting the rent or managing the property is outrageous and a legal ban was long overdue.

"We are not saying that all letting agent fees are always unfair, but they must be clearly stated and transparent and only apply for services from which a landlord clearly benefits.

"Luckily landlords are increasingly waking up to the fact that they can save thousands of pounds by taking a DIY approach to managing their portfolio."

SOURCE: Smartlandlord.co.uk, NLA, OFT, 10/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

Buy-to-let mortgage Paragon says it does not know when it will start large scale lending again given the current conditions in the UK housing market after its new lending fell by three-quarters last year.

Lenders took possession of 11,300 homes in the third quarter, up from 10,100 in the second despite government efforts to make home repossessions a last resort, the Council of Mortgage lenders said on Friday.

Rod Kent, former chairman of nationalised bank Bradford & Bingley, said the B&B board was "massively sorry" for the bank's collapse in September.

Chancellor Alistair Darling has told banking chiefs to pass on the interest rate cut to customers "as quickly as possible".

Brown Tells Banks: 'Pass On Cut'
Prime Minister Gordon Brown has joined the Chancellor in urging Britain's banks to pass on the 1.5% interest rate cut to customers in full.

Banks are under growing pressure to pass on yesterday's massive 1.5% interest rate cut to their customers.

Some 1.2 million households could fall into negative equity if the housing slump continues, the Bank of England said on Tuesday.

Mortgage approvals are still running at less than half the level of this time last year, according to the British Bankers' Association.

The number of first-time buyers getting onto the property ladder slumped to a record low during August.