Buy to let boom continues according to new survey

Buy to let boom continues according to new survey

According to the latest report from mortgage industy tech supplier, IRESS, the buy to let sector continues to go from strength to strength, seeing a 49% increase in buy to let compared with it's 2015 Survey.

The survey provides insight across many aspects of the mortgage market and application processing. Now in its fifth year, the 2016 survey analysed the responses of 18 lenders, with a combined share of gross mortgage lending of 68% in 2015, equating to £152bn of loans. Among the survey participants, the buy to let sector saw by far the largest year-on-year growth at 49%, while mortgages to first time buyers saw just a 0.7% increase and residential loans to home movers actually fell by 5.6%.

The intermediary channel continues to see the lion’s share of the mortgage market, with 82% of sales now going through this channel and almost three quarters (70%) of lenders experiencing an increase in the number of applications submitted by brokers over the last year. The direct channel continued to decline across branch and telephony, although sales via the internet increased, albeit from a low base. The internet channel remains a relatively small part of distribution, but as new digital entrants and so called “digital” brokers enter the market, this channel could double in the next 18 to 24 months.

A further key finding was that the number of accepts has declined in all sales channels: with accepts in branch dropping by 20%, in consumer by 18%, in telephony by 15% and by 9% in the intermediary channel. Banks have a significantly higher percentage of accepts than mutuals, likely to be due to banks investing in more sophisticated decisioning and income verification, differences in risk appetite and application complexity.

The survey results show that the impact of the Mortgage Market Review (MMR) is still apparent, with average number of days to offer, a key measure of efficient customer service, significantly higher than pre MMR levels, although there has been a slight improvement over last year.


Lenders’ use of digital technology grew over the last year, with mobile quote and decision in principle increasing by 185%, case tracking by 72% and full mortgage application by 117%. More lenders are now providing direct and in-branch video links to mortgage advisers, offering more options to consumers and enabling more direct sales per adviser to be processed.

Henry Woodcock, Principal Mortgage Consultant, IRESS, commented: “The most significant finding in the survey is the continued rise of the buy to let market. This sector has increased by more than 213% over the five years since the first IRESS Mortgage Efficiency Survey, but with the recent change of taxation around investment purchases for landlords, it seems unlikely that this stellar growth will continue. In the last year, loans to first time buyers have been fairly flat, suggesting that despite government incentives and innovative products offered by lenders, the struggle to get on the housing ladder remains a significant challenge.

 The survey also shows that two years on, MMR continues to impact the time taken to process mortgage cases. We believe that the average number of days to offer will only improve significantly when the valuation process is fully digitalised and developments in sharing of current account and credit data come to fruition to enable lenders to use automated income and expenditure verification.”

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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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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

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
Mark 01 Mar 2017

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

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
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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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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