Strong First Half of Year for Buy to Let

The mortgage market is still continuing to be better than the mortgage market as a whole.

Many brokers think that the buy to let market will continue to grow at least for the time being. The volatile money market is causing investors to turn to property. Other sources think that the buy to let market is only doing so well because of the lack of property on the market and rental incomes are steady which could mean that the demand for rental property will fall.

Nearly 172,000 buy to let mortgages were taken out in the first six months of 2007. These totalled around £21bn. By the end of June 2007 the outstanding number of buy to let loans were 938,500 totalling £108bn. This meant an increase of 14% since the second half of 2006. Buy to let mortgages now account for 10% of the market compared to 3% in 2002.

The trend was for long-term investments as part of investors pension plans and short- term investors were beginning to withdraw from the market.

The buy to let sector continued to have a very low percentage of those in arrears with only 0.63% arrears in the first quarter of 2007 against 1.06% for loans overall.

The market according to business volume was still strong.

Statistics recorded that most lenders now prepared to lend individual investors up to £2.5m that reflected property prices and the confidence of lenders.

Buy To Let Market Summary