(1888PressRelease)
February 24, 2007 - Some 333,000 mortgages were taken out by landlords last year making up 11 per of all new lending, according to new research by the Council of Mortgage Lenders (CML).
The market that is now worth £38.4 billion a year grew 57 per cent in value on the 2005 figure.
Furthermore, over the second half of the year, buy-to-let borrowing reached an all time high of £21 billion since the survey began back in 1998.
And it appears that buy-to-let borrowers are more successful than the average mortgage holder as only 0.59 per cent of the sector's mortgages were three months or more in arrears, compared to an industry average of 0.89 per cent.
Commenting on the figures, CML director general Michael Coogan said: "The buy-to-let market has 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."
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester concurred.
"Today's CML figures on the spectacular growth of the buy-to-let market in 2006 reaffirms that it is now an established market," he said.
"It is encouraging that more than half of the buy-to-let lending in 2006 related to the purchase of new investment properties rather than remortgaging, and it would not be surprising if this trend continues. The buy-to-let market looks set to continue to grow.
The buy-to-let phenomenon began in the mid-1990s when laws governing landlords were relaxed and gave private individuals access to a market which had previously been run by a privileged few.
Since then, the market has rocketed. The figures speak for themselves: i n 1998 just 28,000 buy-to-let mortgages issued to borrowers but only nine years later, this has swelled to 850,000.
Nigel Terrington, Paragon Group chief executive, believes that societal change is also an important factor in boosting the sector.
"Rising immigration, growing household numbers, expanding student population and the increasing tendency of young people to defer their first home purchase, all mean there is a need for greater flexibility in our housing stock," he said.
"The private rented sector is ideally suited to meet that need."
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