Released on: October 13, 2007, 3:17 am

Press Release Author: Jim watson

Industry: Real Estate

Press Release Summary: Despite all the claims that buy-to-let\'s doomsday was just
around the corner, investors are continuing to defy the pessimistic pundits and
enter the market, new evidence has shown.

Press Release Body: Despite all the claims that buy-to-let\'s doomsday was just
around the corner, investors are continuing to defy the pessimistic pundits and
enter the market, new evidence has shown.

The number of buy-to-let mortgages rose by 37 per cent in the year to August 2007,
according to the latest statistics by the Council of Mortgage Lenders (CML), which
said this trend had helped to prop up an otherwise cooling housing market.

Certainly, the buy-to-let trend contrasts with the residential market, where the
number of home loans in August fell from 111,000 in 2006 to 99,000 in 2007. CML
director general Michael Coogan said: \"Affordability clearly remains challenging but
there may be some relief for borrowers with expectations of an interest rate cut,
perhaps as early as November,\" which may offer a change of fortunes in the
residential sector. But even with interest rates static at 5.75 per cent the
buy-to-let sector rolls on relentlessly.

The question may now be asked of just how much the industry is going to grow? Will
Britain become increasingly a nation of renters just as, ironically, traditional
renters like the French become homeowners? Will buy-to-let grow in both good times
and bad for the rest of the housing market? Will it ultimately grow out of necessity
as targets for new house building are not met?

Malcolm Harrison, a spokesperson for the Association of Residential Letting Agents
(Arla) said the answer was that buy-to-let still had some expanding to do, but not
to the extent that other countries might be familiar with.

He said: \"I don\'t think we\'ll ever get to the proportion of renting that you see in
Europe and North America, actually. All our forecasts suggest that the private
rented sector will increase from its current 11 per cent of all housing to round
about 15 per cent of all housing in the next ten years.\"

Mr Harrison added that the private rented sector \"nearly died\" in the 1980s (when
home ownership expanded) but was revived partly because of the rise of buy-to-let,
which brought \"better standards\" into the sector.

Even so, Mr Harrison pointed out, the current number of buy-to-let mortgages is
around 900,000, which is around a third of the rental market. Thus the issue of what
proportion of the UK housing market will be rental at any time in the future will
depend only partly on the expansion of industry, with the propensity for other
property owners to rent out accommodation also being a factor.

Besides which, it may just be that buy-to-let will only grow to reach 15 per cent of
the UK housing market because the culture of home ownership, far from shriveling up
and dying, will create more pressure for the kinds of measures from the market and
government alike to make it easier for people to get on the housing ladder.

Thus, if the expansion of the buy-to-let market is a finite entity, perhaps now,
while there is still growth, is the time to invest. This in turn may explain why the
sun is still shining on buy-to-let mortgages while other markets feel an autumnal
chill.

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