BTL approvals hit nine-year high

BTL approvals hit nine-year high

Buy-to-let mortgage approvals have surged ahead of stamp duty changes resulting in home lending hitting a nine year peak.

According to esurv, January saw 85,432 house purchase approvals – up 20.6% month-on-month from 70,837 in December 2015. This is the highest number of monthly house purchase approvals since 87,594 in October 2007 – nearly nine years ago.

On an annual basis, house purchase lending rose 39.3% from 61,341 approved loans in January 2015.

Richard Sexton, director of e.surv chartered surveyors, commented: “Buy-to-let approvals contributed to the growth in January home lending. Concerns about the sector’s growth have sparked a wave of legislation but as stamp duty changes come into effect this April, there’s been a rush to get buy-to-let loans approved. Many have predicted a narrowing of the buy-to-let sector but actually what we’re seeing in lending quarters appears to be the opposite.

This buy-to-let rise also hasn’t been at the expense of first-time buyers. The number of small-deposit loans granted has risen in January, and this is a great sign that lenders still have the appetite to give first-timers a chance. Rising wages and a delayed interest rate rise have also boosted first-timer’s prospects.

For those investing in a second property it’s also a race to beat April’s legislation – adding an extra boost to overall house purchase approval levels.”


Small desposit lending increased in January to total 12,388 loan approvals in absolute terms, climbing from December’s total of 11,546. On an annual basis, this rose substantially from the 9,385 small-deposit loans granted in January 2015.

Although January saw a numerical increase in the number of small-deposit loans granted this may not necessarily translate to increasing sales. The latest First Time Buyer Tracker from Your Move and Reeds Rains reveals that December 2015 saw 26,600 first-time buyer sales, down 4.7% monthly from 27,900 in November. This slight dip came amid a lower average deposit cost standing at £25,292 in December, down from £25,409 in November.

Alongside this, the proportion of total lending comprised by small-deposit approvals in January decreased to 14.5% from 16.3% in both November and December 2015 – and formed the lowest proportion seen since 13.9% in December 2014.

Richard Sexton added: “A buy-to-let surge has pushed down the proportion of small-deposit lending – but this figure conceals a more realistic and upbeat picture. In fact, January has been a positive month for small-deposit borrowers – the number of loans approved have reached their highest total for four months, since September 2015. And so the slowdown in small-deposit lending seen towards the end of 2015 hasn’t continued into 2016 so far.

For first-time buyers, prospects are looking bright. Government initiatives introduced to help first-timers onto the property ladder appear to be working. According to the Treasury, large numbers of aspiring homeowners have taken advantage of the Help to Buy ISA, and this is an incredibly promising start.

Challenges do remain, supply issues are ongoing and the promise of starter homes may take longer to be realised, but for first-time buyers, lenders remain willing to support credit-worthy borrowers.”

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Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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