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Last Updated: Wednesday, 16 August 2006, 10:23 GMT 11:23 UK
Buy-to-let landlords borrow more
To Let sign
Letting by private landlords is booming
New mortgage borrowing by buy-to-let landlords hit record levels in the first half of this year.

Lenders granted 152,500 such mortgages, 17% more than in the previous six months, the Council for Mortgage Lenders (CML) reported.

There are now 767,000 buy-to-let mortgages, accounting for 8% of all current home lending.

Of these mortgages, 0.73% were in arrears, although that was fewer than for the market as a whole.

Currently, 0.96% of all mortgages are three months or more in arrears.

Rate worries

"The buy-to-let market remains robust, underpinned by strong rental demand, " said CML director general Michael Coogan.

"But the view that interest rates are now more firmly on an upward trend is likely to cause the rapid growth of buy-to-let investment to slow in the coming months."

According to the Association of Residential Letting Agents, people with buy-to-let mortgages now account for around one third of all private landlords.

The buy-to-let phenomenon took off ten years ago when the housing laws were changed.

A change to the law on assured shorthold tenancies meant that a loophole was closed which had meant that landlords could inadvertently create permanent sitting tenancies instead.

Research has shown that most buy-to-let landlords are middle aged, are investing as an alternative to a pension and own just one or two extra properties.

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