News

Buy-to-let (BTL) lending continued to grow in Q3 2011, with 34,500 BTL loans throughout the industry advanced at a value of £3.8bn. This represented a rise of 16% by volume and 19% by value compared to Q2.

There were an estimated 1.38 million BTL mortgages (worth £157bn) outstanding at the end of Q3 2011, up on 1.3 million outstanding loans (worth £150bn) at the end of Q2. BTL continued to represent 12% of the total value of mortgages outstanding.

An increase in house purchase lending made the largest contribution to the increase in total BTL lending. House purchase BTL lending rose to £1.88bn in Q3 – a 27% increase on the Q2 figure. There was £1.89bn of remortgage lending Q3 – an 11% increase compared to Q2.

This shows that new landlords are coming into the market and existing landlords are expanding their portfolios.

More people are renting and void periods are thought to be at record lows. So all good news for investors/landlords! 

Headlines out today suggest that house prices are falling, The Halifax said that house prices fell 1.2% in August and house prices are 2.6% lower now than a year ago - all pretty gloomy reading.

However the 3month on 3month measure showed that prices rose by 1% in the three months to the end of August compared with the previous quarter. August is a notoriously quiet month for house purchases so I think we need to wait and see what happens over the next couple of months - let's hope we don't see the double dip being muted at present, or we might see some serious falls in house prices!

...that is the question on many peoples minds at the moment. Though the figures suggest people are still not sufficiently confident in the economy to make this big decision.

RICS suggest housing activity fell in May in terms of new enquiries from potentail buyers and this was also reflected in the seasonally adjusted mortgage approvals falling slightly month on month from April to May.

The housing market has been so surpressed these last few years that surely there is a huge pent up demand from people wanting to move, whether their first purchase or up the housing ladder.

The main thing thats is stalling the market is the lack of first time buyers with sufficient deposit funds.

 However the number of first time buyer mortgage products has increased from just 62 in June 2009 to 183 deals today, and I dont think it will be long before this competition will cause a move to 95% LTV products and the housing market will be pick up again.

Once this demand starts and the lack of supply (from our increasing population and becuse the builders have been dormant for the last 3years) will mean prices will rise.

So my thoughts are yes, time to buy. (Though even the best comenators do get it wrong - most of the time!)

Monday gave us inflation down to 4.0% from 4.4% last month, yesterday we heard that employment was up by 17,000 in the 3months to the end of February and today we have Debenams and WHSmith showing significant rises in half year profits amongst retail sales which are down 2% overall .

So how is the economy looking?

Nobody really knows and we won't know for another couple of weeks until we have first quarter GDP figures, but I get the feeling it won't be good news.

What this means for interest rates is that we are unlikely to see a rate rise in the near future. Any rise in interest rates could tip the economy over the edge. Households are struggling to make ends meet and if mortgage costs are increased it could be a step too far.