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Written by rosalind renshaw

The number of new buy-to-let loans shot up by 16% in the third quarter of 2011, while the value of mortgages advanced in the sector jumped 19%.

In the three months to September, a total of 34,500 buy-to-let loans were advanced, up from 29,700 in the preceding quarter. The value of lending totalled £3.8bn, up from £3.2bn.

On both measures, buy-to-let lending was at its highest level since the final quarter of 2008, said the Council of Mortgage Lenders.

Of the buy-to-let loans, 18,580 were for buy-to-let purchases – accounting for almost 12% of all house purchase loans.
 
As at the end of September, there were 1,378,700 buy-to-let loans outstanding, worth £157bn, up from 1,296,700 loans worth £150bn 12 months earlier.
 
Despite buy-to-let’s resurgence, the proportion of buy-to-let loans of the overall market is still much lower than the former peak in the first quarter of 2008, when 32,650 mortgages for buy-to-let property purchase accounted for 19% of all loans for house purchase.

CML director general Paul Smee said: “Despite recent improvements, however, buy-to-let lending volumes are still only around one-third of their former peaks.”
 
Nigel Terrington, group chief of specialist lender Paragon, said: “Landlords are reacting to high levels of tenant demand.

“Our experience is that landlords are using their own cash and short-term borrowing to purchase and renovate property, and then remortgaging using buy-to-let finance. I expect this will be a theme of the buy-to-let market for quarters to come.

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