The Council of Mortgage Lenders (CML) latest lending figures showed that the number of loans taken out by buy-to-let investors totalled 23,700 in February, rising just 1% compared to January but up 47% compared to the same month last year.
Remortgaging remained the driving force behind activity in the buy-to-let sector, contributing to 59% of lending in the market in February, compared to just 29% in the homeowner sector.
Paul Smee director general of the CML, was less confident that the buy-to-let market would experience such growth towards the tail-end of 2016.
He said: “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.”
Homeowner and first-time buyer lending also grew substantially since February last year, which the CML said was likely evidence of election uncertainties surrounding the market in early 2015.
Lending in the homeowner purchase market reached the highest amount in February since the same month in 2007, at £8.7bn with 48,000 loans taken out. The seasonal lull meant these figures were up by just 4% compared to January, but were significantly higher on an annual basis, with the amount of lending rising 21% and the number of loans increasing by 12%.
Of this lending, £3.4bn was to first-time buyers, rising 3% on a monthly and 21% on a yearly basis. The amount of loans taken out by these borrowers was up 3% on January and 11% annually to total 22,000.
Meanwhile, homemovers borrowed £5.3bn and took out 26,000 loans, both rising 4% compared to a month earlier but 20% and 14% higher than a year earlier, respectively.
Remortgage activity among homeowners was down 17% compared to January but made significant gains compared to a year ago, rising 37% to reach £4.8bn. The number of remortgaging loans demonstrated a similar trend, falling 15% from January but up 24% on an annual basis to total 28,400.
Jonathan Harris, director of mortgage broker Anderson Harris, said that the absence of an imminent base rate rise meant that the number of people remortgaging was unlikely to increase substantially any time soon.
“History shows that many borrowers wait until rates are actually rising before remortgaging onto a fixed rate, and with many false alarms in the past few years, they may choose to continue taking advantage of low variable rates until the last minute,” he said.