Buy-to-let
Lending on the increase

The number of mortgages taken out by landlords shot up by almost 50 per cent last year according to figures from the Council of Mortgage Lenders (CML).

During 2006, banks, building societies and other lenders handed out 330,000 buy-to-let loans worth a total of £38.4bn.

The CML said the figure represented a 48 per cent increase in volume and a 57 per cent increase in value over 2005 levels.

In all, the number of buy-to-let mortgages outstanding now stands at around 850,000, worth a total of £94.8bn.

Since the end of 2005, when the corresponding figures stood at 702,000 and £73.4bn, the number of buy-to-let mortgages has risen by 21 per cent and their value by 29 per cent.

Buy-to-let lending now represents 9 per cent of the value of all mortgage balances, up from 8 per cent in 2005.

The CML reported that the buy-to-let market had performed even more strongly than the wider market over the course of 2006.

With evidence from other sources of strong tenant demand, rising rents and falling void periods, buy-to-let looks set to continue to remain popular and successful.

The Alliance & Leicester saw a 20 per cent increase in buy-to-let in the second half of 2006 compared with the first half, which would have been helped by attractive pricing and flexible lending policies in the market, along with the return of portfolio landlords.

This article is for your general information and use only and is not intended to address your particular requirements. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without appropriate professional advice after a thorough examination of their particular situation. Your home may be repossessed if you do not keep up repayments on your mortgage.

Article date: 03.07