Figures have revealed the number of buy-to-let properties in the UK is increasing while the rest of the property market struggles.
A buy-to-let mortgage is a type of mortgage for landlords who plan to purchase a property or portfolio of properties for subsequent letting.
The figures show landlords purchased 20% more homes last year compared to the previous year with 66,360 mortgages advanced for 2011 and 13% buy-to-let mortgages were counted as outstanding British homeowner loans.
There has been a steady increase of buy-to-let properties since the property crisis hit in 2009.
Remortgaging buy-to-let properties has also increased by 48% as a result of mortgage conditions improving over the last year.
Advice is being given to people who are thinking about stepping into the buy-to-let property market, with three key factors to look into. Firstly researching the housing market to see how it is shaping up around the time of buying, checking the area that you are moving into meets your requirements and making sure all financial matters are healthy.
The figures revealed there was £14bn worth of gross buy-to-let mortgage advances in 2011, with £6.6bn going towards new purchases and £6.9bn going towards remortgaging. This was a result of landlords withdrawing equity from their existing properties.
Council of Mortgage Lenders Director Paul Smee commented on the new figures saying: “Demand for rented property remains high, so the rationale for buy-to-let remains strong and there is little reason to foresee any change to this positive outlook for the sector.
“The benefits of the availability of good quality, private rented housing should not be overlooked, especially as there are many households which need the flexibility and mobility that the private rented sector is well placed to provide.”
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By Amanda Bainbridge