THE buy-to-let market has continued its recovery to reach its busiest levels since 2008 as landlords expand their property empires due to strong tenant demand.
The number of buy-to-let loans increased by 16% over the three months to the end of September, while the value of mortgages advanced in the sector went up by 19%, the Council for Mortgage Lenders (CML) said.
But while the pick-up previously seen in the second quarter of this year has continued, the latest figures remain roughly around a third of the peak levels seen before the financial crisis.
There were 34,500 buy-to-let loans in the three months to September, totalling £3.8bn, an increase from 29,700 loans in the previous quarter amounting to £3.2bn.
The CML said: “On both measures, buy-to-let lending was at its highest level since the final quarter of 2008.”
The last three months of 2008 saw 38,000 loans advanced, amounting to £4bn.
CML director general Paul Smee said: “With tenant demand remaining strong in the rental sector, some existing buy-to-let landlords have been expanding their portfolios and the growth that returned to the sector in the preceding quarter has continued.
“The recovery of buy-to-let from its low point in 2009 has helped improve supply and choice in the rental market.
“Despite recent improvements, however, buy-to-let lending volumes are still only around one-third of their former peaks.”
Buy-to-let loans reached a peak of 93,100 in the third quarter of 2007 amounting to £12.4bn, before falling back to hover between 21,000 and 24,000 loans in 2009.
Demand has picked up as would-be buyers needing large deposits have encountered difficulty getting on the property ladder, forcing them to rent.
Mark Posniak of Dragonfly Property Finance said: “Buy-to-let is beginning to boom once again. The professionals who have been in the market throughout the recent crisis are now being joined by a growing number of amateur landlords, keen to tap into soaring rents.”
The third quarter also saw the number of buy-to-let mortgages more than three months in arrears decline from 28,300 to 26,300.