Deep Insight Nick Clay 09/07/2019
Lending figures continue to show hesitant PRS
New figures from the FCA/Bank of England on the value of residential loans and buy-to-let activity do not yet show the PRS is back to being a favoured vehicle for UK investors and entrepreneurs.
Table 1 below shows the gross value of new residential loans, as well as the proportion of those loans going into the buy-to-let market.
Key points from the new data include:
- Whilst at first glance the recently published Q1 figures look like they are continuing the fall from the 2018 Q3 peak, there is a clear pattern of Q1 lending being the slowest quarter.
- Quarter-on-quarter, the 2019 Q1 value of gross mortgage advances of £63.3 billion, in fact represents growth of 1.4% c/w 12 months before (though this growth does not factor in inflation).
- The share of lending for buy to let (BTL) purposes (including house purchase, remortgage and further advance) was 14.0% in 2019 Q1, marginally lower than a year earlier.
- Just as new lending is typically at its lowest value in the first quarter, so the proportion of lending for BTL is typically at its highest in the first quarter.
- The proportion of new loans being for BTL purposes in Q1 is at its lowest since Q1 2013 when 12.2% of new residential loans were for BTL.
Table 1: Residential loans and buy-to-let activity
