Landlord insurance clients will be interested to see that the buy to let mortgage market grew by 7% in 2010 according to the Council of Mortgage Lenders. They estimate that at the year end there were 1.3m buy to let mortgages outstanding worth £152bn. The value of buy to let lending in 2010 was around £10.4bn which is an increase of 22% on 2009. The number of loans advanced in the year was 102,000, 10% higher than in 2009. There is also evidence of a reduction in the number of but to let mortgages in arrears.
Council of Mortgage Lenders director general Michael Coogan commented:
“ Funding remains a key constraint on growth in buy to let lending but demand seems resilient and loan performance has 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 materializing in practice.”
A great deal depends on house prices; there is little point in having a healthy buy to let business if your capital asset is going down in value. What do you think? We would love to hear from you.