Buy-to-let mortgage pricing also improved over the previous six months, which Countrywide, the UK’s largest lettings agent predicts led to a 20% increase in year-on-year lending to over £12bn in 2011.
Nigel Stockton, Countrywide financial services director, said: “Whilst buy-to-let lending has grown, it is still only at 30% of the total lending that we’re seeing at the peak of the market. In November’s housing strategy, the government announced some measures to tackle the problem of empty homes; with over 720,000 empty properties in the UK. We welcome any Government support to encourage investment and the transfer of these properties to the buy-to-let sector in order to alleviate the current supply and demand imbalance.”
CML data out today shows 84,000 more buy-to-let mortgages borrowed year-on-year, although lending in the third and fourth quarters remained steady at 34,300 loans worth £4bn.
Compared with the height of the market in the third quarter of 2007, when quarterly lending totalled over 93,000 loans worth £12.7bn, the buy-to-let market continues to operate at relatively subdued levels, but is in recovery, said the trade body.
CML director general Paul Smee said: “Buy-to-let lending continues to perform well. 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.
Jonathan Samuels, CEO of Dragonfly Property Finance: “Landlords are making hay while the sun shines, adding to their portfolios in order to increase their exposure. The fact that property prices are low is contributing to this trend.
“Landlords can buy low and rent high, which is manna from heaven.”
Fuelling the market, nearly a quarter of a million new tenants registered to rent privately in 2011, a 24% increase on 2010, according to Countrywide figures.
Research showed almost 80,000 new tenants registered with its agents in Q3 2011, with August generating the highest number of enquiries ever recorded by the company.
Geographically, London recorded the biggest enquiry spike, with a 35% increase in tenant applications. The North saw a 22% rise and Scotland saw 21% in the South.
As demand gathers pace, properties are increasingly being let before they are advertised, with the average advertised rental property taking 13.6 days to be let or occupied last year.
Cohabiting couples under the age of 35 are the biggest percentage of new tenants looking to rent, but families are also increasingly looking to rent privately, particularly in the North and South East.
Nick Dunning, commercial director at Countrywide said: “We are in the midst of a rental boom as renting has become the new norm. Despite gradual improvements in property levels, it is not enough to satisfy the ever-increasing levels of demand. With a record number of tenants entering the private rental sector, there is a vast shortage of properties available in all areas of UK, which could potentially fuel a steady rise in rent prices throughout 2012.”
