Buy To Let 'Staying Strong'

The buy to let mortgage market will prove resilient this year, despite the economic fallout caused by the credit crunch.

Experts contacted by news agency Reuters have cited strong market fundamentals in the UK as a key factor behind the continued survival of the sector. Low interest rates and unemployment, combined with strong demand for rental property, are predicted to counteract the downwards pressure on the sector from the ongoing financial crisis.

Of particular concern to buy to let mortgage holders is the withdrawals of mortgage deals from lenders in recent times. Figures from Moneyfacts.co.uk have put the overall shrinkage of loan offers on the market at 60 per cent.

While conceding that these industry trends might result in some small buy to let investors facing difficulty, Jeremy Law at Bradford & Bingley said that those holding "significant" portfolios would remain well-positioned to survive the crunch - and even benefit from it.

This position is backed up by recent figures from the Council of Mortgage Lenders, which showed that just 0.7 per cent of buy to let mortgages were in over three months of arrears by the end of 2007. This figure is significantly lower than the 1.1 per cent average across the market as a whole and testifies to the sector's strength.