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BOOM IN BUY-TO LET MORTGAGES AS RENT PRICES RISE

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£14.1billion worth of buy-to-let mortgages were issued by banks last year, the highest figure since 2008.

In total, 124,000 such mortgages were issued last year, up from 94,100 in 2010 as the market continued to recover, the Council of Mortgages Lenders said.

Interest in the buy-to-let sector has grown because rent prices have risen as would-be first time buyers struggle to get on the property ladder.

Despite being the strongest figures since 2008, the 2011 results still sit at half the £28 billion worth of buy-to-let mortgage approvals in that year, showing the market remains 'relatively subdued' by historic standards, the body said.

CML director-general Paul Smee said: 'Buy-to-let lending continues to perform well.

'Demand for rented property remains high, so the rationale for buy-to-let remains strong, and there is little reason to foresee any change to this positive outlook for the sector.

'These figures do not suggest that buy-to-let is crowding out first-time buyers; more that it is performing a really important role within the overall housing market.

'The benefits of the availability of good quality, private rented housing should not be overlooked, especially as there are many households which need the flexibility and mobility that the private rented sector is well placed to provide.'

Lenders have been gradually expanding their deals to attract landlords, but the CML insisted the latest figures showed that first-time buyers were not being 'crowded out' of the market.
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