The buy-to-let housing sector is growing strongly as the uncertainty over stock market stability continues.

With house prices still rising, the Council of mortgage Lenders (CML) said many people viewed property as a more secure investment than pensions or shares.

Figures released by the CML show that during the first half of 2003 the number of mortgages in the sector rose by 22 per cent compared with the end of last year.

Up to June, 75,100 mortgages, worth £7.7 billion, were approved.

This meant there were now 334,800 mortgages, valued at £31.2 billion, in the sector.

This accounted for 4.3 per cent of residential mortgage lending.

The average value of a buy-to-let loan increased from £94,000 to £102,500.

Remortgaging in the sector was also buoyant, accounting for 39 per cent of gross advances this year.

But the CML said despite the rise in lending, arrears had risen.

During the six months to June, 0.45 per cent of people with a buy-to-let loan were at least three months in arrears, a rise of 0.3 per cent on the second half of 2002.

The strength of the market was supported by the Royal Institution of Chartered Surveyors, which revealed last month that demand for rented accommodation remained strong.

CML's director general Michael Coogan said: "Although there has been a recent improvement in stock market performance, it is not surprising that many people still see property as a safer haven.

"But spreading risk is also important and it is rarely good advice to put all your eggs in one basket - even if it has all the traditionally solid qualities of bricks and mortar.

"As part of a balanced investment strategy, and for those looking beyond short-term speculation, buy-to-let continues to offer attractive opportunities."

Thursday September 25, 2003