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As has often been documented, the health and status of the housing market has long been utilised as in the capacity of a barometer for the common standing of the economy in its entirety at any given moment in time. Subsequent to the remarkable damage sustained to the property market, such as negative equity and a decrease and ensuing stagnation of demand, as a direct consequence of the downturn and following market recession, analysts are more reluctant to rely wholly upon the housing sector in this capacity.

Despite this, however, a strong belief in the tentative increases in the mortgage market as supporting predictions of an overall recovery within the sector continues to gather momentum and therefore assumed credence. Donna Green examines the news of further growth within the buy-to-let mortgage market and investigates the stability of using a market with integral component of flux as a gauge for the wider economy.

The news following the release of statistics detailing the property sector throughout the third quarter of 2009 has predominantly focused upon the gains made and increases in the areas of mortgages. Whilst it is important to attribute proportional concession to these hesitant moves towards economic recovery, it is also crucial to fully explore their context in the wider markets of remortgages, equity release and refinancing.

While it has been widely reported that the demand for mortgages has increased, with the Council of Mortgage Lenders detailing a two per cent increase in number of mortgage loans throughout the month of September, there has been increasing unease about the isolation in which this growth has occurred.

Despite a return in interest from first-time property buyers, with the figures given by the CML as documenting a five per cent increase in approved mortgages during quarter three of 2009, the news that recovery in the buy-to-let mortgage sector contrasting with continuing decreases in the remortgage loan sector comes with a feeling of concern.

The Director General of the Council of Mortgage Lenders, Michael Coogan, commented on the tentative growth of the sector and the obstacles still facing the whole property financing market in his admission that:

"At this stage, the recovery is modest - but the figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome."

Whilst the figures of a ten per cent increase in the approvals of buy-to-let mortgages within the third quarter of 2009 show that this growth is significant, the figures and their corresponding commentary do not effectively portray the concern with which analysts are regarding the assumed recovery of the sector as a whole. Until the remortgaging, equity release and property refinancing sectors stabilise, the market is in danger of a deeper recession arising as a consequence of unbalanced expansion.

This article was written by Donna Green on behalf of property financing website Remortgage.com, who provide free information, guides and tools on matters of remortgaging and refinancing your property. For further independent, professional remortgage advice please visit their website.