Buy-to-let mortgage borrowing set new records in the first half of 2006, as more and more Brits became landlords. Inspired by TV shows like Property Ladder, more than 150,000 buy-to-let mortgage loans were taken out in the first half of the year, worth £17.5 billion.
By value this is 20% higher than the previous record, posted in the second half of 2005, according to figures from the Council of Mortgage Lenders.
There are currently 767,000 outstanding residential buy-to-let mortgages worth £83.9 billion.
"The buy-to-let remains robust, underpinned by strong rental demand," said CML director general Michael Coogan.
We feel that the market had been helped by lenders relaxing their lending criteria, making it much easier to arrange a buy to let mortgage.
Some lenders have increased their maximum loan to value to 90% and some have relaxed rental requirements to as low as 115% of the monthly mortgage commitment, and in a few cases only 100%.
These changes allow the astute investor to remortgage to release equity to provide a deposit for a further purchase.
Peter Bolton King, chief executive of the National Association of Estate Agents, said: "The report issued by the Council of Mortgage Lenders clearly shows that confidence in the wider housing market has returned.
"Fears of a price fall at the end of 2004 and the start of 2005 led to many amateur investors choosing to cash in on profits they had made in preceding years. We are pleased to see that this area of the market has picked up alongside residential sales."
He added that it would be interesting to see what impact the introduction of licensing of houses in multiple occupation, enforceable from July 6th 2006, would have on the market.
Properties with three or more storeys let to two or more households comprising five or more people have to be licensed under the regulations, which are most likely to affect bedsits and student lets.
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