Highlighting continued flickers of life in a sector driven by strong rental demand, CML data revealed that lenders advanced 40,000 mortgages worth £5.1bn during the second quarter, compared to 33,500 mortgages worth £4.2bn in the preceding three months.
The number of loans advanced and the value of lending was the highest since the third quarter of 2008. However the market still has much ground to make to recover to pre-financial crisis levels of the third quarter of 2006 when 99,500 loans worth £12.7bn were advanced.
Year-on-year buy-to-let lending also grew by 19 per cent in volume, rising from 33,600 loans worth £3.9bn in the third quarter of 2012.
Jackie Bennett, head of policy for CML, said: “Growth is being helped by strong rental demand and more the widespread availability of mortgages, which is creating more opportunities for landlords to remortgage.”
David Whittaker, managing director of national advisory firm Mortgages for Business, said: “The buy-to-let market is in rude health. Demand for rental property remains red-hot, with yields north of 6 per cent on typical rental property, and it will stay that way while housing stock remains in such short supply and first-time buyer lending remains low by past standards.”