Buy-to-let continues to grow

Landlords have continued to use buy-to-let mortgages to fund their portfolio expansion, new research indicates.

Figures released by the Council of Mortgage Lenders (CML) show that borrowers took out 171,800 new buy-to-let mortgages in the first half of 2007 - collectively worth £21.2 billion.

Buy-to-let mortgages now account for ten per cent of all the mortgage balance in the UK. This compares to just three per cent five years ago and shows how more and more people are becoming landlords.

The CML reported that strong demand for rental properties and shrinking void periods helped ensure that fewer buy-to-let mortgages were in arrears than in the rest of the market in the first half of the year.

Separate figures from the CML show that fewer first-time buyers were able to afford to buy a home in June than could in the same month last year.

Rising interest rates and house prices mean that many young people will have to rent for longer as they save to afford theirown home.