There has been a drop in buy-to-let lending, but the decline is less dramatic than the general purchase market, according to the latest UK Finance Household Review.
The data shows that buy-to-let lending fell 11% year-on-year. This compares with a 48% fall in general house purchase activity.
Richard Rowntree, managing director of mortgages at Paragon Bank, commented: “The figures show that the buy-to-let market was significantly impacted by coronavirus during the second quarter, as was the broader mortgage market, but we are confident that the sector can make a strong recovery in the second half of the year.
“Landlord demand for investment is robust, no doubt boosted by the stamp duty holiday, but also because of long-term fundamentals underpinning the demand for good quality privately rented homes.
“Overall buy-to-let lending during the first half of the year was down by 11% in value compared to 2019, which considering the impact of the pandemic on the housing market isn’t as bad as originally feared and the buy-to-let sector is again proving its defensive qualities. Activity rebounded after the housing market reopened in May and we should start to see that reflected in an increased level of completions across new purchases and remortgages during the second half of the year.
“People have had a once in a lifetime opportunity to re-evaluate how and where they want to live. This is creating record levels of activity across both the residential and lettings markets and transactions are buoyant generally. No doubt this will eventually settle down to levels more in line with the historical average, but that doesn’t appear to be any time soon.”