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Buy-to-let sector marks 15-year anniversary

Nigel Terrington, Paragon Group Chief Executive, 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.

"Many argue that the PRS would have died without buy-to-let; it had fallen to around 7% of all housing by the early nineties and there was a lack of finance going into the sector. The PRS now provides a home for nearly one in six households and 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 PRS that remains fit for purpose. The future strength of the buy-to-let market will be central to that."

He added: "The PRS 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."

Key statistics:

* The value of outstanding buy-to-let balances has risen from £5.4billion in 1999 (the first year the CML recorded the data) to £154.5billion today. Buy-to-let represents 12.4% of total mortgage outstanding balances;
* Since the beginning of 1999, 2.1 million buy-to-let loans have been advanced and there are currently 1.3 million loans outstanding;
* The number of properties in the PRS (in England) has risen from 2.1 million in 1996 to 3.9 million in 2010;
* The proportion of households in the PRS (in England) has risen from 10.1% in 1996 to 15.6% in 2010;
* The number of homes in the PRS classed as "decent" by the DCLG rose by 59% in the 10 years following 1996;
* The proportion of PRS properties in the lowest two energy efficiency bands fell from 46.7% in 1996 to 19% in 2009.

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