Buy-to-let mortgages highest since 2007 in rush to beat stamp duty hike

Lending to buy-to-let investors climbed to its highest levels since 2007 in the final months of 2015, in signs of a stampede to beat a looming stamp duty hike.

Some £10 billion was handed out for buy-to-let purposes in the final quarter of 2015, up from £7.7 billion a year earlier, according to the Mortgage Lenders and Administrators report released jointly by the Bank of England and the Financial Conduct Authority (FCA).

The report, which included lending for house purchase as well as re-mortgaging, said the latest buy-to-let total "is the highest since 2007".

The findings come ahead of a stamp duty hike for this sector of the market, which means that from April 1, buy-to-let investors will pay three percentage points above current stamp duty rates. Several housing market reports have indicated that investors have been rushing to beat the hike.

They were released as the Council of Mortgage Lenders (CML) put some data on its website about the buy-to-let market.

The CML said that buy-to-let borrowers typically borrow 70% of the property's value when making a house purchase, while first-time buyers borrow 78% of the property's value on average and home movers borrow 66%.

It estimates at least three-quarters (75%) of new buy-to-let lending goes to borrowers who already have at least one other buy-to-let mortgaged property with that lender.

The CML said: "However, this probably understates the number of multi-property investors, as it takes no account of properties which are either mortgaged with other lenders or not mortgaged at all."