Middle-Class 'Buy-To-Let Dream' Is Over

Investing in buy-to-let property is on the verge of becoming unaffordable for middle-class savers as stricter lending rules mean they will soon need at least a 40pc deposit to qualify for a mortgage. New, tighter lending criteria set to be enforced as early as this autumn by the Bank of England will lock large groups of savers out Britain's rental market, and limit it to an elite club of wealthy investors only. Under the new system borrowers are likely to have to find nearly twice as much money for a down payment on a property than at present, as around half of buy-to-let mortgages sold today only require a 25pc deposit, according to figures from Mortgages for Business, a broker. Read more on the Daily Telegraph website.

Bank Lending To Property Developers Halves In Just Two Years To £16bn

Bank lending to property developers has halved over the last two years, making it more difficult for companies to kick-start schemes that could help ease the housing crisis. Bank finance has dropped from £34bn in January 2014 to just £16bn the same month this year – with bridging finance or auction finance particularly hard to come by. These are usually short term loans used to take ownership of a property before obtaining a traditional term loan or mortgage. However, without access to this type of finance developers cannot take projects beyond the planning stage. Banks are happy to offer long term mortgages and term loans secured on property but see the short-term loans as too risky. As a result alternative lenders, who can make quicker decisions and have different lending criteria to banks, are stepping into the lending gap. Read more on the City AM website.

Bank Of England Concerns Over Buy-To-Let Boom

The growing buy-to-let property market in the UK could post a threat to wider financial stability, a Bank of England committee has said. Buy-to-let mortgage lending had the potential to "amplify" a housing boom and bust, the Bank's Financial Stability Committee (FPC) concluded. Lending in this sector has risen by 40% since 2008, the FPC said. It stopped short of suggesting any intervention by government or regulators at this stage. "As the market continues to grow, particularly if driven by loosening of underwriting standards, the sector could pose risks to broader financial stability, both through credit risk to banks and the amplification of movements in the housing market," the committee said. Read more on the BBC website.

Britain Leans On Consumers as Mortgage Approvals, Loans Surge

British mortgage approvals surged by the most in six years in April and lending to individuals also rose sharply. Data from the Bank of England supported expectations that the pace of the broader economic recovery will pick up again by mid-year after slowing at the start of 2015, giving a nudge to a long-running debate about when interest rates might rise. Mortgage approvals for house purchases hit their highest level in 14 months, reaching 68,076 from 61,945 in March. The rise consumer lending was not far off March's seven-year record monthly jump. The figures were a reminder of the lopsidedness of Britain's recovery, with weak manufacturing and trade unlikely to contribute much to growth in the coming months. Read more on Yahoo News.

'The Housing Market Is Well Off the Boil'

Further signs of a cooling housing market have emerged with two separate reports showing a slump in mortgage lending. Nationwide said gross mortgage lending had fallen by £900million as Britain's biggest building society released its latest set of financial results. It lent £13.1billion in the six months to 30 September 2014, down from £14billion in the period before and it now accounts for 12.2 per cent of the mortgage market, compared to 15.4 per cent previously. Net lending was also £2billion lower at £3.6billion. At the same time, the British Bankers' Association said mortgage approvals for house purchases fell for a fourth month in a row to a 17-month low of 37,076 in October. Read more on the Daily Mail website.

Rise in Buy-To-Let and First-Time Buyer Lending

Gross UK mortgage lending rose 12 per cent in July to £16.7 billion, up from £14.9 billion in June and 29 per cent on July2012, according to the Council of Mortgage Lenders (CML). This growth was particularly fuelled by first-time buyers. In July, 25,300 loans were made to first-time buyers, worth a total of £3.5bn, was 6 six per cent on June and 46 per cent on July last year. The typical first-time buyer loan size was almost unchanged from June at £117,038. Lending for buy-to-let also rose -15,200 buy-to-let loans were made in July, a rise of 12 per cent compared to June. Read more on the CML website.