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BTL market begins to thaw

BTL market begins to thaw

Category: Mortgages

Updated: 12/08/2010
First Published: 12/08/2010

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The freezing up of the buy-to-let mortgage market that resulted from the credit crunch has eased slightly, according to the Council of Mortgage Lenders (CML).

Despite buy-to-let lending remaining subdued, 13% more mortgages were taken out in the second quarter of 2010 than in the first quarter.

The figure of 24,900 was also 15% higher than in the same period a year earlier.

The value of buy-to-let lending in the first quarter amounted to £2.4 billion, of which £1 billion was remortgaging, although business was only just over a quarter of its level of three years ago.

The data also showed that arrears cases had improved markedly.

Although repossession rates remain higher than in the owner-occupier market, the CML said this was partly due to the extended forbearance that lenders allow home buyers to help prevent them losing their homes.

"The buy-to-let market has continued to grow, albeit slowly, throughout the period since the credit crunch," said CML director general Michael Coogan.

"And with fewer people able to afford the entry costs to home-ownership, as well as the pressure on social housing, tenant demand for private rented property will remain strong.

"Finance for private landlords, whether institutional or individual, is crucial if the UK is to have enough homes to meet the needs of the population.

"Funding conditions for lenders remain tight, but there is every reason to expect the buy-to-let sector to continue to make a powerful contribution to helping meet the country's varied housing needs."

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