Buy-to-let enjoyed another strong month in October with a 7% jump in lending and 5% rise in remortgages.
But property experts warn that this is just the calm before the storm about to engulf the market.
House purchase loans totalled £1.6 billion and remortgages totalled £2.2 billion, according to latest figures from the Council of Mortgage Lenders.
This is the highest monthly gross buy-to-let lending level by value and by volume since the CML began tracking buy-to-let data on a monthly basis in January 2013.
Year-on-year growth figures were even more impressive, with buy-to-let house purchase lending up 33% and remortgages up 47%.
Danny Waters, chief executive officer of Enterprise Finance, said: “Buy-to-let activity continues to improve, but this is very much the relative calm before the storm given the rush as property investors look to expand their portfolios before the hefty new stamp duty charges for landlords come into effect.”
Jeremy Duncombe, director, Legal & General Mortgage Club, also expected a burst of buy-to-let activity before the surcharge comes into force on 1 April.
“Prospective landlords may rush to the market ahead of this change to avoid the additional cost, which will drive up mortgage lending in Q1 2016.
“The resulting increase in demand, combined with the current lack of available properties, is likely to push up house prices at the beginning of the year.”
Simon Checkley, managing director of brokers Private Finance, predicted a contraction in the supply of rental property once the surcharge kicks in.
“Unfortunately for many tenants, this could give rise to upward pressure on rentals towards the back end of 2016,” he said.