Buy-to-let loan advances down 70%

Buy-to-let loan advances were down almost 70% from last year in the second quarter of 2009 according to figures from the Council of Mortgage Lenders (CML).

About 21,600 loans were advanced from April to June compared with 69,900 in the same period in 2008. There were 22,400 buy-to-let loans advanced in the preceding quarter, down 4%. It marks the seventh quarter of consecutive decline in the sector.

By value, buy-to-let gross advances totalled £1.9bn in the quarter or 5.6% of total gross mortgage lending – down from £8.9bn in 2008.

CML said that the peak in buy-to-let arrears had passed with the number of loans more than three months behind fell 10% from the previous quarter to 40,200.

Vincenzo Rampulla, public affairs office for the National Landlords Association said problems were still severe for the sector: "What is still clear is that the lack of available credit continues to stifle market growth and, therefore, reduce available housing options.

“We are hearing from a greater number of landlords who are seeking to expand their portfolios but who cannot get the appropriate finance. We would call on lenders to see what more they can do to increase the flow of credit."