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.”

Join our mailing list:

Leave a comment



Latest Comments

ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

view article
NathanGreen
NathanGreen 16 Jun 2016

Seeing that the tenants are quite satisfied with their landlords and the properties is indeed great. I wonder, though, what is the situation in London alone? The tenants face sky-high rent levels in the...

view article
AndiMur
AndiMur 15 Jun 2016

TheGuardian published the same forecast. But on the other hand, professional brokers express different opinions. According totranio.com, an exit from the EU would not affect the demand/supply imbalance...

view article
Gary Holmes
Gary Holmes 14 Jun 2016

Having a professionally completed inventory at check-in and check-out is clearly (to me at least) of minor value. Tenants make un-authorised modifications and/or walk off with items that belong to the

view article
Violet Gibson
Violet Gibson 14 Jun 2016

Cautious people think buying off-plan is reckless, but over the past few years investors have literally made fortunes.Pre-release prices have obvious benefits for the developer, who gets instant finance...

view article
Kate Windleton
Kate Windleton 14 Jun 2016

An interesting research indeed. I guess that is in complete contrast with the United States where people often move from one coast to another. It will be interesting to hear the trends for people moving...

view article
NathanGreen
NathanGreen 14 Jun 2016

I think it all depends on the market conditions and how well your company is doing. You will agree that you can't demand more when you're killing yourself just to hang in there. Sometimes you need all

view article
ChristinaReedUK
ChristinaReedUK 13 Jun 2016

What does "detecting a bad vibe" mean actually. I've had certain vibes like these and yet have always found a reason , if there's any, why I don't like a certain property. The property maintenance might...

view article
keybanks estates
keybanks estates 08 Jun 2016

Great News for first time buyers, about time two!

view article
NathanGreen
NathanGreen 07 Jun 2016

I agree with #6 - you should maintain your garden according to the target buyer. One thing is universal, though - cleanliness and order. Having the yard clutter-free and clean will help people who do enjoy...

view article
NathanGreen
NathanGreen 06 Jun 2016

I will always say that London is overrated. Sure it is the capital, but it's too stuffed in there. It's more of a business city to me.

view article
Paul
Paul 25 May 2016

Estate agents are pathetic when it comes to fees. They have this 'I had to do it at 1% because that's what the others were quoting' mentality. We are the most expensive agents in our area, charging double...

view article

Related stories

More articles from Finance