By Robert Carry
Gross lending in the UK's buy-to-let mortgage market grew in the third quarter for the first time in two years, according to new data published by Britain's Council of Mortgage Lenders (CML).
The value of buy-to-let loans reached a value of £2.1bn ($3.8bn) - a 10% increase on the previous three months.
The rise comes despite the fact that remortgaging capacity was constrained by the unavailability of buy-to-let mortgages at over 80% loan-to-value (LTV).
The number of outstanding buy-to-let loans grew to 1,205,000, representing 11% of all mortgages by the end of the quarter. The value of outstanding buy-to-let mortgages increased by 2.5% to £144.2bn ($261.5).
"At this stage, the recovery is modest - but the figures show that buy-to-let is here to stay," said CML director general Michael Coogan.
He continued, "Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome.
"Future demand for housing in all tenures supported by lenders will remain strong, despite mortgage funding constraints and low construction rates. With funding for social housing under pressure, the private rented sector has a strong future.
Coogan said he believed mortgage lenders will have an important role to play in further growth of the rental sector.