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Buy to Let

Buy-to-let market celebrates 18 years of lending

Edward Murray
Written By:
Edward Murray
Posted:
Updated:
02/02/2015

Paragon Mortgages has released a report to celebrate the buy-to-let sector

According to the report there are 1.6 million outstanding buy-to-let mortgages and in Q2 landlords took out a total of 46,200 new buy-to-let products.

The report also highlights how tenant profiles have changed with the number of retirees renting increasing from 4.7% in 2008 to 7.5% five years later.

Lenders now provide over 700 products for landlords to choose from and the latest data from the English Housing Survey showed that the private rented sector now accounts for almost 18% of all households.

“With the deregulation of the industry through the 1988 Housing Act, combined with the introduction of a suitable financing model through buy-to-let, the private rental sector has grown substantially since the 1990s,” said Valerie Bannister, president of the Association of Residential Letting Agents.

John Heron, managing director of Paragon Mortgages, added: “The buy-to-let market has been a force for good for the wider UK housing market… It enabled landlords to access finance that was better designed to meet the specific needs of the rental market at much more competitive interest rates and thus helped expand quality and choice in the private rented sector.”

In its short life the buy-to-let sector has endured its fair share of difficulties and after hitting a record gross lending figure of £45.7bn in 2007 it collapsed to just £8.6bn in 2009.

It has since bounced back from those difficult days as Ying Tan, managing director at The Buy to Let Business, explained: “The market is in good shape and the fundamentals are there. Demand and rent figures are both strong and we are seeing sustainable growth. Since the market fell from its peak, lending today is not yet half of what new lending was.”

This points towards the potential for further growth and Tan added: “Interest rates are low, product criteria are more flexible and there are new entrants coming to market.”


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