The Council of Mortgage Lenders says the 17% boom in buy-to-let in the first half of 2006 is a sign of a buoyant rental market.The trade body last week rel- eased figures for the first half of this year showing lenders advancing 152,500 buy-to-let loans worth 17.5bn – an increase of 17% by volume and 20% by value compared with the second half of 2005. Michael Coogan, director-general of the CML, says: “Investors have shown that they are quick to adjust to changing market conditions so the view that interest rates are now firmly on an upward trend is likely to slow down the growth in buy-to-let investment in the coming months. “But the rental market remains fundamentally sound and is likely to continue to offer good long-term prospects for astute investors.” However, Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors, says that house prices rising and renting becoming more expensive is bad news for first-time-buyers. And Ray Boulger, senior technical manager at John Charcol, says the plight of first-time buyers will benefit buy-to-let investors, and there is no sign that this will change in the short term. He adds: “This month’s base rate rise and fears of another later this year are likely to deter some potential first-time buyers from taking the plunge into the property market at the moment.” The CML also says that typical underwriting criteria in the buy-to- let market remains unchanged, with an average maximum LTV ratio of 85% and lenders requiring rental income to exceed mortgage repayments by at least 25%. But Boulger disagrees and says underwriting criteria have changed, with many lenders realising that lending to investors is not as risky as was once perceived. The CML’s figures show that the proportion of buy-to-let mortgages three months in arrears has risen from 0.68% to 0.73%.