Buy-to-let lending in Q1 2015 went up by almost 20% year-on-year, dramatically outpacing residential lending which increased by 1.6%, new analysis from Equifax Touchstone has revealed.
Overall spending for the quarter came in at £36.2bn, a year-on-year rise of 5.4%. The average value of each mortgage was £177,060 for residential (in Q1 2014 it was £170,730); £151,033 for buy-to-let (in Q1 2014 it was £145,017).
The findings from Equifax Touchstone, which covers 92% of the intermediated lending market, showed that March was the top sales month for mortgage brokers in eight months. Additionally, lending increased by 24.3% on February 2015, hitting £15bn. UK wide improvement in the market was witnessed, with only two postcode areas – Perth and the Western Isles in Scotland – recording negative growth during this period.
Although lending levels have gone up, the quantity of active brokers in the market has dropped in the last year, down from 8,288 in quarter 1 of 2014 to 8,028 in quarter 1 of 2015.
“In March we saw lending power ahead and the sluggish trend witnessed at the end of last year has been reversed,” Iain Hill, Relationship Manager at Equifax Touchstone, said.
“There have been lingering doubts over the market recovery and it is encouraging to see such positive growth.”
He added: “While traditional savings accounts continue to offer low returns, savers are looking for alternative ways to invest their money, prompting substantial growth in the buy-to-let market. An oversupply of people and an undersupply of homes makes buy-to-let an attractive proposition and we expect this trend to continue to gather pace over the coming months.”