Significant rise in buy-to-let lending

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.’