There was a significant increase in buy-to-let lending in 2011 in the UK as more property investors seek to take advantage of rising tenant demand for rental accommodation across the country.

Domestic property investors have been cashing in on rising rental yields by actively adding to their buy-to-let portfolios, while more international investors have been snapping up homes in the UK, particularly in London, with a view to providing a solid rental income.

Figures supplied by the Council of Mortgage Lenders reveals that there was a 40% rise in the value of mortgage lending last year, with the number of buy-to-let loans also increasing by 32%.

The number of buy-to-let mortgages reached almost 35,000 in the fourth quarter of 2011, which is not dissimilar to levels reached in Q3 2011 (34,300).

A Q4 FACT survey conducted by buy-to-let specialist Paragon Mortgages found an increase in buy-to-let business in Q4 2011. 42% said that the most popular reason for landlords obtaining a buy-to-let mortgage was to extend their portfolio and 33% was for remortgaging cases. Of those intermediaries surveyed, 53% expect to write more buy-to-let business in 2012 which would suggest that there will be further substantial growth in the sector this year.

John Heron, Managing Director of Paragon Mortgages, commented: “We should be clear though that this does not signal a return to the boom conditions we saw in 2006 and 2007, but buy-to-let is making huge progress and we are seeing solid, steady levels of growth. 2012 will be another interesting year for the buy-to-let market, and we need to continue to build on the success of 2011.”

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