Buy to let boosted mortgage lending figures for August as loans to buy homes melted away, according to banks and building societies.
Total lending was up 1.6 per cent for the month, said the lenders.
The findings were confirmed by the National Landlords Association (NLA), which reported the number of buy to let mortgages in the second quarter was up 25 per cent on the first three months of the year.
Average loan amounts also went up by around £2,000 to £138,525 – up 6.4 per cent since January.
The NLA explains the increase as more lenders offering higher loan-to-value (LTV) deals – especially for houses in multiple occupation (HMOs).
More than half of landlords applying for buy to let mortgages were seeking 70 per cent LTV or more, although the average for the quarter was 67 per cent.
Landlords shunned fixed rates, with six out of 10 opting for variable rate loans.
David Salusbury, the NLA chairman, said: “These findings are positive. Landlords provide a valuable source of housing at a time when tenants are finding it increasingly difficult to find properties to rent. Any mortgage products that encourage greater investment in the private-rented sector should be encouraged.”
The banks echoed the findings of the NLA survey with August’s lending statistics.
British Banking Association statistics director, David Dooks said: “The weak economic environment continues to undermine confidence in both household and business sectors, which impacts on borrowing demand.
“The banks’ new mortgage lending has ticked up in the past couple of months with higher buy-to-let demand, and some business sectors are edging towards year-on-year borrowing growth, although the general landscape is one of households not wanting to take on more borrowing and businesses waiting for trading conditions to improve before borrowing to expand or invest. Against this backdrop, paying down existing debt dominates the net lending figures.”
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