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12 May 2010

Boom years ahead for buy-to-let lending

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by Gill Montia

Boom years ahead for buy-to-let lending

Business information provider, Datamonitor, is predicting that gross buy-to-let lending in the UK will increase 150% over the next four years.

In a report entitled “Buy-to-Let Mortgages and the Rental Sector” the analyst forecasts a rise in gross lending to £25.6 billion in 2014, up from £8.5 billion in 2009.

However, the figure is expected to remain flat before increasing to £15.8 billion in 2012 and £20.2 billion in 2013.

According to the report, the upturn will come as investor confidence receives a boost from stabilising house prices, and demand for rental property continues to exceed supply.

Datamonitor’s study also reveals that rents are beginning to stabilise, and that buy-to-let mortgage arrears are in line with the wider market.

Returning to the supply and demand factor, recent research from the Association of Residential Lettings Agents (ARLA) shows that during the first quarter of 2010, nearly two-thirds of members reported a shortage of properties available to rent, with the proportion up 50% on the previous quarter.

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