Credit crunch not affecting buy-to-let market

The UK buy-to-let sector has continued to stay buoyant amid the failing housing market with concerns over the effect of tightening credit control.

Research compiled by the largest letting agency in the country has found that new lets beginning during January and February are up by 21 per cent from the same period last year.

The credit squeeze mixed with fluctuating interest rates has led to a rise in the demand for rental properties, with predominately first time buyers, not able to afford the deposit or able to arrange a high loan to value mortgage any more, still needing a roof over their heads.

Also it has been noted that there is an increase in potential buyers renting in the short term, waiting to make a purchase, due to the negative opinion surrounding the housing market and wanting to see what is going to happen to prices in the near future.

This has allowed rental property owners to expand their portfolios, as they know demand for rentals is in the ascendancy. A fact confirmed by the Council of Mortgage Lenders, that shows buy-to-let lending has increased from £20.8 billion in the last six months of 2006 up to £24.1 billion for the second half of 2007, with the trend expected to rise further.

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March 12^th 2008