Buy-to-let recovery continues

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Buy-to-let mortgages worth £14.1bn were advanced last year, the highest figure since 2008, new figures show.

A total of 124,000 such mortgages were made last year, up from 94,100 in 2010 as the market continued to recover, the Council of Mortgage Lenders (CML) said.

Despite being the strongest figures since 2008, the 2011 results still sit at half the £28bn worth of buy-to-let mortgage approvals in that year, showing the market remains “relatively subdued” by historic standards, the body said.

Some 34,800 buy-to-let mortgages were advanced during the fourth quarter of 2011, with a total value of £4bn, virtually unchanged from the third quarter’s figures.

Interest in the buy-to-let market has grown as the rental sector saw a boom last year, as many potential buyers were unable to raise a deposit or meet borrowing criteria.

Lenders have been gradually expanding their deals to attract landlords, but the CML insisted the latest figures showed that first-time buyers were not being “crowded out” of the market.

CML director general Paul Smee said: “Buy-to-let lending continues to perform well. Demand for rented property remains high, so the rationale for buy-to-let remains strong, and there is little reason to foresee any change.”