Buy-to-let lending has fallen significantly as tougher lending rules and the introduction of the 3% stamp duty surcharge on additional homes continues to hit landlords hard.
Landlords borrowed £3bn in October, down 21% on the same month last year, although it is up slightly on September, according to the latest data from the Council for Mortgage Lenders (CML).
Paul Smee, director general of the CML, said: “Buy-to-let house purchase lending remains weak following the change to stamp duty on second properties in April.
“With lenders are now tightening affordability criteria ahead of the Prudential Regulation Authority's stress tests and the forthcoming tax relief changes next year, these lower volumes are likely to be the ‘new normal’.”
However, buy-to-let – and homeowner - remortgage lending has recovered and is running at its strongest levels since 2009.
Landlord remortgaging was down 9.1% last year, but rose 5.3% on September.
Smee added: “This appears to be linked to borrowers taking advantage of the re-pricing of mortgages following the base rate cut.”
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