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Buy-to-let market shows recovery signs

Buy-to-let market shows recovery signs

Category: Mortgages

Updated: 14/08/2009
First Published: 14/08/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

There are encouraging signs that the buy-to-let market is beginning to find its feet, after the decline in new lending slowed in the second quarter of the year.

Latest figures from the Council of Mortgage Lenders showed 21,600 new buy-to-let loans were advanced in the three months to the end of June, just four per cent down on the 22,400 reported in the first quarter.

Meanwhile, the number of buy-to-let mortgaged properties in arrears fell 17 per cent on the previous quarter. The number taken into possession remained unchanged.

The news will be welcomed by tenants who are at risk of being evicted at short notice from the property they are renting because their landlord has defaulted on mortgage repayments.

Despite the better news, it is still feared a lack of mortgage finance in the sector is holding back a full recovery.

"The news from the Council of Mortgage Lenders, whilst not unexpected, is nonetheless confirmation that things are starting to pick up for buy-to-let investors," said Ian Potter, operations manager of the Association of Residential Letting Agents.

"An illiquid market can never be a positive one for landlords, tenants or the wider economy."

Vincenzo Rampulla, public affairs officer for the National Landlords Association, also welcomed the figures but said more must be done to make credit more easily accessible.

"We are hearing from a greater number of landlords who are seeking to expand their portfolios but who cannot get the appropriate finance," he commented. "We would call on lenders to see what more they can do to increase the flow of credit."

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