Off the back of British Bankers' Association statistics released on Monday, the data shows that landlords are cashing in on the inability of first-time buyers to obtain a mortgage.
Squeezing affordability in the latter half of 2007 saw buy-to-let lending increase by £2.9 billion between June and December 2007.
While remortgaging growth was strong within the sector - helping push the number of loans taken out in the second half of the year to 179,100 from 171,800 - it undoubtedly had a greater impact within the country's residential sector.
Michael Coogan, CML director general, said that buy-to-let was "fulfilling an important role" within the housing market, with its resilience against market conditions helping the flow of quality rental homes.
"Many buy-to-let loans have interest rates linked to interbank rates, so may have seen hefty increases in payments when Libor rose to abnormally high levels in the second half of 2007," said Coogan.
"These are now likely to be returning to lower levels in line with the reduction in Libor rates since December last year.
The CML also reported that the total number of outstanding buy-to-let mortgages has now passed the million mark, reaching 1,038,000 at the end of 2007. This is up nearly 23 per cent up on the 846,900 a year earlier.
Additionally, arrears remain lower than in the wider mortgage market. At the end of the year only 0.73 per cent of buy-to-let loans were in arrears of more than three months compared with 1.1 per cent seen in the wider mortgage market.
The proportion of buy-to-let mortgages taken into possession was also smaller than in the wider market - 0.18 per cent for the year as a whole, up from 0.13 per cent in 2006 but lower than the 0.23 per cent in the wider market in 2007.
However these figures, and Coogan's prediction of a continued demand for buy-to-let in 2008 conflicts with the levels of activity seen by Connells Survey & Valuation.
Managing director, Ross Bowen, said that the buy-to-let sector had seen its share of the purchase market drop to 10 per cent at the start of this year, seeing it suffer more than other lending areas.
"The total number of people buying homes has fallen to its lowest level in fourteen years," said Bowen, "However the case for long term capital gains remains.
"Rental yields in some areas of the market continue to offer a lower return than many other forms of investment. Though with reports of increasing tenant demand, we may see rental returns increase over the coming months.
"Given current market instability and lenders’ tightening of funding criteria, it may be sometime before an established trend develops."
