When it comes to buy-to-let, the British are dabblers. At most, perhaps, 10 percent of all current mortgages in the UK finance buy-to-let investments.
The Irish have taken BTL to a completely different level. Take a look at my first chart. Those growth rates look rather fast, particularly around 2004.
Look closer; those are 3 month growth rates. In the last four years, volumes of Irish buy-to-let mortgages typically increased by around 10 percent every three months. In 2004, the annual growth rate was 51 percent. Even in 2007, when the Irish housing market is supposed to be slowing, BTL mortgage volumes are up over 16 percent compared to the previous year.
With that kind of BTL activity, Irish mortgage volumes in general are up dramatically. In the last four years, mortgage lending in Ireland is up 125 percent, with BTL mortgage lending increasing by 250 percent.
Remember, these growth rates apply to just four short years. Triple digit increases in bank lending to a housing market where prices are exploding. Does anyone smell a banking crisis here?
However, here is the killer chart. In December 2007, over 26 percent of outstanding mortgages in Ireland financed a buy-to-let investment. The whole country must be just one big BTL scam.
Who is the daddy? The Irish BTL bubble is the daddy. And there was I thinking that UK had that title sown up.
Data source: Central Bank of Ireland's website.