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The buy-to-let mortgage sector grew in the third quarter of 2009 – the first quarter it has done so in two years, according to the Council of Mortgage Lenders.

Gross lending in the buy-to-let mortgage market grew by 10% over the last three months, to £2.1bn. The third quarter also saw a similar first increase in two years in the number of buy-to-let loans advanced, from 21,600 to 23,700.

Its also figures also revealed that the number of outstanding buy-to-let loans grew to 1,205,000, which is 11% of all mortgages in the UK – the value of outstanding buy-to-let mortgages increased by 2.5% to £144.2bn, according to the mortgage council.

The CML says low borrowing costs are also contributing to a continued improvement in cases of buy-to-let arrears – it found that for the third quarter in a row, there was a decline in the number of buy-to-let mortgages with arrears with just 20,500 landlords in the UK owing more than 1.5% of their overall loan.

Michael Coogan, director general of the CML says: "These figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome."

David Brown, commercial director of LSL Property Services, says: “It’s a great relief for investors that buy-to-let finance is starting to become more available. With numbers of loans increasing for the first time in two years, the buy-to-let mortgage market is returning, a little.

"But it's a slow process – the number of loans is still only a quarter of that in 2007. With all the attention on first-time buyers, we mustn’t forget that landlords and property investors play a crucial role in the housing market – providing accommodation for those who are unable or unwilling to buy."

SOURCE: CML, LSL, 12/11/09

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