The Council of Mortgage Lenders (CML) has provided reassurance over the sharp rise in the number of buy-to-let mortgages in arrears and a fall in the number of new mortgage advances.
Figures released last week by the CML saw the number of buy-to-let mortgages in arrears of at least three months increase by 66 per cent between the first half of 2004 and the second - a rise from 1,893 to 3,157.
However, the CML has said that fears these figures indicate that the buy-to-let market is in crisis are unfounded.
"There has been a large rise in the number of arrears but that has to be taken in the context of how low the numbers are to start with as well as a corresponding rise in interest rates during the same period," CML spokesman Bernard Clarke told Reuters.
Mr Clarke also said that whilst CML data showing the number of advances of buy-to-let mortgages had fallen to 97,000 from 119,000 over the same period might not show growth in that area, it does not mean the rental market as a whole is not growing.
"We are still seeing growth, but slower growth in new lending," he stated.
Mr Clarke blamed three factors for this: a strong period of house price growth linked to lower short-term prospects for capital growth and lower yields on those properties. Click here to find out more about buy-to-let mortgages.
© DeHavilland Information Services plc