It comes as no surprise that the latest figures released by CML (Council of Mortgage Lenders) show that the buy-to-let market increased by 7% in 2010, with the total lending volume rising by 22%.
In the final quarter of 2010, lenders advanced 28,600 new buy-to-let loans worth £3bn. This was a rise of 6% by volume and 7% by value from Q3.
At the end of the year there were an estimated 1.3 million buy-to-let mortgages outstanding, worth £152bn, or 12% of the UK mortgage market by total value or 11.5% by number of the total UK mortgage market.
Between 2009 and 2010, three-month arrears levels dropped slightly from 2.97% to 2.44%. Landlord arrears remain slightly higher than those in the owner-occupied market, where arrears levels also improved from 2.42% in 2009, to 2.16% in 2010.
However, according to CML, the arrears cap has narrowed, with low interest rates helping to lower buy-to-let arrears further than the owner-occupier market. Although, CML director general Michael Coogan said funding remains a key constraint, but demand and performance have improved.
"Looking ahead, loan performance could potentially be adversely affected by rising rent arrears or interest rate rises, but at present there is no indication of these pressures materialising in practice."
As funding becomes more readily available, there will be great opportunities for landlords looking for a long-term investment. Capital Economics estimates that the private rental sector will be home to nearly one in five households by 2015, up from one in seven currently, so it remains crucial that the UK has a vibrant and healthy buy-to-let market.
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