Banks report new year buy-to-let rush
Major banks have provided more evidence of a burst of activity in the UK mortgage market by landlords keen to avoid a stamp duty rise.
In January, gross mortgage borrowing from the High Street banks rose to its highest level since mid-2008.
The number of mortgages approved for house purchases was 27% higher than a year earlier, the British Bankers' Association (BBA) said.
The BBA said that investors were keen to complete before tax changes.
From the start of April, most owners in England and Wales will pay a 3% surcharge on stamp duty on purchases of buy-to-let properties and second homes.
Road to sales
The statistics follow similar findings by the Council of Mortgage Lenders (CML) which reported an eight-year high in mortgage borrowing.
However, it appears that - although mortgage lending is rising - the number of property sales that have actually been completed is yet to pick up significantly.
The number of property sales in the UK in January actually fell on a seasonally-adjusted basis compared with December, according to figures from HM Revenue and Customs (HMRC). There were 105,940 homes sold - a similar total to October and November.
The new stamp duty surcharge is expected to raise £1bn extra for the Treasury by 2021, but landlords have argued it will "choke off" investment in rented properties.
But Samuel Tombs, chief UK economist for Pantheon Macroeconomics, said that demand will continue to exceed supply in the property market, pushing up house prices as a result.
"Looking ahead, we expect approvals to remain on an upward trend. Consumer confidence is high, real income gains remain strong and mortgage rates are set to fall again in response to the decline in wholesale funding costs," he said.
"New buyer enquiries at estate agents have been rising quickly and point to mortgage approvals rising by a further 5% over the next three months. With the active supply of homes on the market close to record lows, house prices look set for very strong gains."
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