Lending figures continue to show hesitant PRS

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:

  1. 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 quarter 1 lending being the slowest quarter. 
  2. 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). 
  3. 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.
  4. 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. 
  5. 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

Nick Clay

Nick Clay MSc, PgDip is the lead Research Officer for the NRLA, having previously worked for the Residential Landlords Association (RLA). Before joining the RLA Nick had a successful career working for various consultancy companies, Whitehall and academia. He has specialised in advising clients on business support, promoting entrepreneurship and evaluating labour market initiatives. Nick worked as a Senior Economist for a large multi-national consultancy advising Whitehall and City Regions on major infrastructure projects.