10:15 AM, 24th September 2011, About 13 years ago
Buy to let is growing up fast, the industry celebrates its 15th birthday today (September 24, 2011).
Buy to let was officially born on September 24, 1996, at a meeting in London attended by the proud parents – the Association of Residential Letting Agents (ARLA), the Council of Mortgage Lenders and a number of mortgage lenders.
In those days, buy to let still represented a sizeable chunk of the UK housing market, but was not a popular general investment.
Buy to let now provides homes for 15.6 per cent of English households – up from 10.1 per cent in 1996. In 2010, the number of buy to let properties stood at 3.9 million, at the outset in1996 it was 2.1 million.
Nigel Terrington, of Paragon Mortgages, one of the lenders at the vanguard of buy to let since 1996, said: “Buy-to-let has galvanised the rental market over the past 15 years, whilst providing an attractive asset class for property investors.
“Buy-to-let finance was the catalyst for the revitalisation of the modern private rented sector. The flow of fresh capital modernised a tired and decaying sector, driving up standards of accommodation and choice for tenants.
“Its importance will increase in future years as population growth and housing completions diverge. More people are choosing to live in rented accommodation and we must ensure that they have a private rented sector that remains fit for purpose. The future strength of the buy-to-let market will be central to that.”
Over the years, the value of outstanding buy-to-let loans has risen from £5.4 billion in 1999, which was the first year data was recorded, to £154.5 billion. Buy-to-let accounts for 12.4 per cent of all mortgages.
Terrington added: “The private rented sector makes a great contribution to the UK economy – it facilitates labour mobility and flexibility, provides an income to thousands of small businesses, supports a number of associated industries, such as letting agents and maintenance companies, oils the wheels of the housing market and makes a great contribution to the public purse.”