Buy-to-let market "starting to pick up"

The buy-to-let market is showing signs of stabilising, according to figures released today by the Council of Mortgage Lenders (CML).

Alongside arrears improving "significantly", the council highlighted the slowing decline in new lending.

There were 21,600 new buy-to-let loans advanced in Q2, representing a 4% decline over the first three months of the year.

And this relative good news for the market mirrors other CML statistics released today, showing that the number of mortgage repossessions fell in the second quarter of 2009 to 11,400 - equivalent to around one in 1,000 of the UK's mortgages.

The statistics were cautiously welcomed by the Association of Residential Letting Agents.

Operations manager Ian Potter said that the news was confirmation of "things starting to pick up" for buy-to-let investors.

"We are encouraged by the fact that mortgage arrears seem to be declining, which is not only of benefit to landlords facing financial difficulty but also to their tenants who have been threatened with the repossession of their home and who have very little protection against this," he said.

"What the CML data also shows, as with its statistics on repossessions also out today, is that the buy-to-let market is experiencing a lag effect, driven by an almost complete drying up of lending early in the year, when the recession was being most acutely felt.

"In our own research, ARLA members have been reporting a rise in buy-to-let activity in the first two quarters of this year with around double the number of landlords buying more properties for the two consecutive quarters than in the previous three months."

IMAGE Chris Radburn/PA Wire