Figures from the Bank of England reveal that the value of buy to let mortgages has rocketed by 65% in value from £4.1bn in the first quarter of 2013 to £6.8bn for the same period this year.
Buy to let mortgages now account for 14% of all mortgage applications; in 2013 it was 12%.
Demand for buy to let properties is being driven by low interest rates and strong demand from tenants needing somewhere to live.
2014 could be the best year for buy to let mortgages
Now some experts are predicting that 2014 will be the best year for buy to let mortgage lending since the financial crisis.
However, one survey has also revealed that two thirds of buy to let mortgage brokers have not seen an increase in business since the introduction of the Mortgage Market Review (MMR).
Despite this, financial analysts are predicting that buy to let landlords will be advanced around £25bn in loans this year while others say it might even reach £28bn.
Mortgage brokers are also aware that some people who may not be accepted for a mortgage on a property may apply for a buy to let mortgage where the lending criteria is easier.
Action may be taken on the BTL mortgage market
However, Mark Carney, the Governor of the Bank of England said he might yet act in a bid to stifle the growing market. In a recent interview, Mr Carney said: “We are vigilant about the risk to the housing market and ensuring that we aren't building risks for the medium term so banks need to have enough capital when underwriting these new mortgages.”
He added that it was also important that for anyone taking out a new mortgage that they could afford to pay for it over its lifetime.
Private landlords looking to buy close to home
Meanwhile, a survey from the National Landlords Association has revealed that most landlords are looking to extend their portfolios in the area where they live.Meanwhile, a survey from the National Landlords Association has revealed that most landlords are looking to extend their portfolios in the area where they live.
When questioned, 75% of residential landlords said that they would be buying close to home with just 10% saying they would buy a property within a 100 mile radius.
In addition, the association has also put together a list of considerations to help buy to let landlords make a success of their investment.
Among the advice is that they should research carefully local market rents and conditions particularly on what yields can be expected on a buy to let property.
