On a more positive note, latest data from the Council of Mortgage Lenders on the buy-to-let market revealed that the sector continues to thrive with a significant jump in lending compared with the first quarter of 2011. Low interest rates and rising demand for rental property from tenants is making the private rental sector an attractive investment proposition.
There has also been a significant increase in landlords remortgaging, which we haven't seen for some time. This is down to more competitive buy-to-let deals coming onto the market, enticing borrowers off the low 'go to' rates at the end of their fixed or discounted periods.
While capital growth on buy-to-let is likely to remain subdued for some time outside of prime central London at least, income is strong and returns favourable when compared with other investments. Buy-to-let is only going to grow in popularity as more lenders return to the market, rates and criteria become increasingly competitive, and would-be first-time buyers continue to struggle to get on the housing ladder.
However, while the private rental sector becomes increasingly important to the provision of housing in the UK, it has a long way to go to reach the 2007 peak of the market, reflecting the continued caution of lenders and investors alike.