The buy-to-let market looks set to soar in 2011 after the sector grew by 7% in 2010.
Latest figures from the Council of Mortgage Lenders reveal there are an estimated 1.3 million buy-to-let mortgages outstanding, worth £152bn, up 7% on 2009 and account-ing for 12% of the total mortgage market.
Total value of buy-to-let lending in 2010 was £10.4bn, 22% higher than in 2009, and the total number of loans advanced was 102,000, 10% higher than the previous year.
David Whittaker, managing dir-ector of Mortgages For Business, says 2011 will be even better.
He says: “Banks will have to lend more this year and who better to lend to than professional investors with large deposits and proven track records of repayment.
“Rental demand is soaring and this has given landlords the perfect opportunity to cash in on the easing lending market and conjure up record rents.”
Paragon Mortgages re-entered the sector in 2010 and several new entrants are considering buy-to-let, including Abbey for Intermediaries and Yorkshire Building Society.
Nigel Terrington, Paragon Group chief executive, says: “The buy-to-let market is on the front foot again and entering a period of growth.
“The UK is experiencing unprece-dented levels of tenant demand and the private rented sector needs to expand. It is crucial that the UK has a vibrant and healthy buy-to-let market.”
In Q4, 28,600 new buy-to-let loans worth £3bn were advanced, an increase of 6% by volume and 7% by value from Q3.
But Ed Stansfield, chief property economist at Capital Economics, says the figures are not as encour-aging as they seem because the rise was driven by higher levels of remortgaging, with house purchases showing a slight decline.
He says: “Like owner-occupiers, landlords also approached the hous-ing market with more trepidation.”