Business

Buy-to-let surge to subside say lenders

flats Image copyright Getty Images

This year's surge in buy-to-let lending is expected to subside following tax changes, the Council of Mortgage Lenders (CML) has said.

Figures for the month of February showed that landlords borrowed £3.7bn - a 61% rise on the same month in 2015.

But since 1 April anyone buying a second home has had to pay a 3% surcharge on Stamp Duty.

As a result many landlords have rushed through property purchases to beat the deadline.

"Activity has been boosted by landlords seeking to complete purchases before tax changes in April," said Paul Smee, the director general of the CML.

"We do not expect activity to show such strong year-on-year growth later in the year."

Stamp Duty Bands since 1 April
Price band Standard rate Buy-to-Let/ 2nd home
Up to £125,000 0% 3%
£125,001 to £250,000 2% 5%
£250,001 to £925,000 5% 8%
£925,001 to £1.5m 10% 13%
£1.5m+ 12% 15%
Source: HMRC

Home-owners borrowed £8.7bn in February, a 21% rise on February 2015, the CML said.

This was the highest amount borrowed for nine years.

However the steep rise reflected what the CML called a "sluggish market" in 2015, ahead of the UK general election.

Related Internet links

The BBC is not responsible for the content of external Internet sites