Buy-to-let sales in August 2015 were up by 54.1% compared to the corresponding month last year hitting £3.31bn, research from Equifax Touchstone shows.
An increase in private rental rates of more than 10% since the start of the year has further contributed to this growth and interest in the sector.
Despite figures increasing year-on-year, August buy-to-let sales dropped by 12.5% from the £3.77bn reported in the previous month, reflecting the holiday slowdown. However, this was considerably less than the drop in sales of 20.8% in the corresponding period last year, a sign of a much stronger buy-to-let market this year.
Iain Hill, relationship manager at Equifax Touchstone, said: “We have seen promising signs of growth in the buy-to-let lending market in the past year as demand continues to rise and this has been further consolidated by last month’s figures. We expect this upward trend to continue in the coming months.
“The current favourable market conditions, supported by low interest rates and the greater capacity for lenders to offer mortgages, have encouraged borrowers to enter the market.”
Background to buy-to-let Equity Release
Equity release on a buy-to-let property has been available via lifetime mortgages on and off since 2009. These initial loans required a short-hold tenancy agreement in place, and rental income usually had to at least cover the interest charged by the lender.
However, since 2013, many efforts have been made to force a rethink in the potential of landlord equity release schemes. Since then, interest rates have fallen significantly, flexible equity release schemes have been designed and repayment options introduced.