Buy to let business booming

Property investors are still taking out buy to let mortgages in their droves, the Council of Mortgage Lenders has said.

15:39 14 February 2005

Property investors are still taking out buy to let mortgages in their droves, the Council of Mortgage Lenders has said.

The sector grew by 34 per cent over the last year, meaning by the end of 2004 there were 526,200 buy-to-let mortgages worth 52.2 billion.

Property investors took out 21.8 billion worth of buy-to-let mortgages last year, up 14 per cent on 2003, although fewer mortgages were taken out in the last six months of 2004 than in the first half.

"As the housing market boom gradually subsides, it is no surprise that growth in buy-to-let lending is slowing down," commented Andrew Heywood, Council of Mortgage Lenders senior policy adviser.

Today new government figures revealed that property prices fell slightly at the end of last year, seeing the cost of an average house fall from 180,126 to 178,906 in December.

But a softening housing market does not look set to affect people investing in rental properties, which account for around six per cent of the mortgage market.