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Buy-to-let market continues comeback

Buy-to-let market continues comeback

Category: Mortgages

Updated: 10/02/2011
First Published: 10/02/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The buy-to-let sector is slowly but surely improving, with lending on the up in 2010, figures from the Council of Mortgage Lenders (CML) show.

The total value of buy-to-let lending was £10.4 billion last year, a rise of more than a fifth (22%) compared with 2009.

At 102,000, the total number of buy-to-let loans was 10% higher year-on-year.

In the last three months of the year, some 28,600 new buy-to-let loans were advanced, worth £3 billion – a rise of 6% by volume and 7% by value from the third quarter.Looking ahead to the prospects for the buy-to-let sector in 2011, the CML expects strong rental demand to remain, driven not least by the continuing deposit constraints to entry to the owner-occupier market.

"Funding remains a key constraint on growth in buy-to-let lending, but demand seems to be resilient and loan performance has improved," said Michael Coogan, CML director general.

"Looking ahead, loan performance could potentially be adversely affected by rising rent arrears or interest rate rises, but at present there is no indication of these pressures materialising in practice.

"There is also a strong counterbalancing growth influence on the buy-to-let market, as tenant demand seems set to remain high in the face of continuing deposit constraints to entering the owner-occupier market."

The figures reflect recent research by which found the buy-to-let market has picked up the New Year where it left off in 2010.

At the end of January, the number of buy-to-let mortgages on offer had risen to 386, up from 351

In the last 12 months, the buy-to-let sector has grown by more than a third and January's rise in product numbers is the eighth in succession.

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