The financial industry has reacted positively after the Council of Mortgage Lenders (CML) announced an increase in buy-to-let mortgages in the UK.
According to its latest figures, there was a 5 per cent increase in buy-to-let lending in the second quarter of 2012.
During the quarter, lenders advanced 33,000 loans, at a value of £3.9 billion, which is up from £3.7 billion in the first quarter.
Specialist lender Paragon Mortgages managing director John Heron said that the changes demonstrated a continually growing confidence in the market.
“It is reassuring to see that buy-to-let lending remains within very prudent limits and that credit performance in the sector continues to be better than in the mortgage market as a whole,” he said.
“There seems to be little doubt that the private rented sector will need to expand to meet the demand of renters. It is vital therefore that landlords remain motivated to add to their portfolios and that buy-to-let finance is available to support landlords in this endeavour.”
Brian Murphy, head of lending at leading broker Mortgage Advice Bureau, added that the increase was being driven by a lack of first-time-buyers.
He said: “This will continue for at least the next 12 months. However, we will eventually reach a ceiling for rental growth, as rates have been rising and can’t keep going up indefinitely.
“The latest figures are encouraging are still following a seasonal pattern which is an indication of stability. However, they are masked to some degree by lenders’ forbearance measures. Lenders are now prepared to work much more closely with borrowers to restructure loans where necessary and make repossessions truly a last resort.”
Estate agent Greene & Co’s managing director David Pollock said: ““Seasoned property investors who are well versed with the concept of buy-to-let have seized the chance grow their portfolios and these latest figures confirm that.
“The rental sector continues to grow especially in London where there is a constant stream of tenants, many of which have put buying their own property on hold and this shows no sign of abating. Savers with a decent pot of money to invest are also searching for higher returns and buy to let is an increasingly attractive option.”
