Buy-to-let mortgages hit record levels

The Council of Mortgage Lenders (CML) has announced that buy-to-let mortgages set a new record in the first half of 2006, with 152,000 loans worth £17.5 billion being advanced.

Previous record totals were measured in 2005 and these figures represent increases of 17 per cent by volume and 20 per cent by value on last year’s numbers.

Throughout the UK there are currently 767,000 outstanding residential buy-to-let mortgages with a total worth of £83.9 billion.

The residential investment mortgage market now accounts for eight per cent of overall levels of lending in the UK, compared to the seven per cent measured in the first half of 2005.

CML director general Michael Coogan said: “The buy-to-let market remains robust, underpinned by strong rental demand.

“But investors have shown that they are quick to adjust to changing market conditions, so the view that interest rates are now more firmly on an upward trend is likely to cause the rapid growth of buy-to-let investment to slow in the coming months.”

Despite this, Mr Coogan said that the rental market “remains sound” for investors and offers “good long-term prospects” for those who approach the market shrewdly.