Significant rise in buy-to-let lending
Official data from the Council of Mortgage Lenders (CML) has revealed that landlords borrowed a total of £3.7 billion during February in order to purchase buy-to-let property.
This figure represents a 61% rise on the same month in 2015.
Additionally, homeowners borrowed £8.7 billion in February, which constitutes a 21% rise on the same month last year, representing the highest amount borrowed in nine years.
However, property market experts expect the surge in buy-to-let borrowing to subside following significant changes to the amount of stamp duty land tax payable on the purchase of additional residential properties.
Since 1 April 2016, those buying an additional property, such as a second home or a buy-to-let, have been required to pay an additional 3% stamp duty surcharge.
Consequently, many landlords have sought to bring forward their purchases to ensure that they avoid the additional charge.
Paul Smee, Director General of the CML, stated: ‘Activity has been boosted by landlords seeking to complete purchases before tax changes in April.
‘We do not expect activity to show such strong year-on-year growth later in the year.’