Outstanding Residential Mortgage Lending

Quarterly Breakdown of Outstanding Residential Mortgage Lending
At the end of Q3 2008

Principal Dwelling Houses                      71.9% (88.7 billion)
Buy-to-let Residential Properties            27.0% (33.3 billion)
Holiday homes/Second homes                1.2% (1.5 billion)

Must admit, I never thought Buy-to-let Residential Properties accounted for such a high percentage of the Outstanding Residential Mortgage Lending.
Anyone else shocked at this?

Not in the slightest, at the height of the bubble banks would have given a mortgage to an illegal alien (of the martian variety).

And how much of that was taken on during the top of the boom

This data only goes back to Q1 2005
ibf.ie/pdfs/IBF%20PwC%20mort … %20web.xls excel or excel reader require]

I’m not surprised. It’s more tax efficient to clear your PPR mortgage before starting at the capital for the buy-to-let mortgage. Same equity position overall, but you get tax relief on all mortgage interest at 41% for the BTL mortgage, but only a limited amount at 20% for the PPR mortgage.

Hence the popularity of interest-only mortgages. Of course, most Canny’s didn’t bother horsing the extra into their PPR mortgage so they haven’t improved their net equity position a bit by being on interest-only.

Over a quater of mortgage lending going to lie to bet?Where the f**k was the regulator?

I knew it was bad but those figures are truly frightening.

The change from Q3 04 to Q3 08, you get

Principal Dwelling Houses                      61% (33.4 billion)
Buy-to-let Residential Properties            38% (20.8 billion)
Holiday homes/Second homes                1% (0.6 billion)

So you get a tasty skew as the bubble bubbled. It’s also possible that the BTL is understated as a lot of trade-up buyers kept their existing property as an investment. Generally it’s more likely that a BTL will be recorded as being owner occupied than vice versa.