Buy-To-Let Lending Soars As Rental Market Prospers

Latest data from the Council of Mortgage Lenders (CML) showed that the buy-to-let market rose strongly in 2010.

At the end of 2010 there were an estimated 1.3 million buy-to-let mortgages in place to the tune of £152bn, accounting for 12% of the total value and 11.5% by number of mortgages outstanding. The total value of buy-to-let lending in 2010 was £10.4bn (22% higher than in 2009), and the total number of loans advanced in the year reached 102,000 (10% higher than 2009).

In particular, in the fourth quarter of 2010 a total of 28,600 new buy-to-let loans were advanced, adding up to £3bn. This represented a rise of 6% by volume and 7% by value from the third quarter.

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

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