Remortgage lending was up 32 per cent year-on-year to £5.8bn in January, according to figures from the Council of Mortgage Lenders.
This amounted to 33,100 loans, up 28 per cent month-on-month and 19 per cent compared to a year ago.
IMLA executive director Peter Williams says: “It’s self-evident that remortgaging is driving buy-to-let activity at the moment, with almost 4,000 more landlords motivated to switch their deal in January than take out a new loan to buy property.
“Remortgaging has risen from 55 per cent of buy-to-let loans in January 2015 to almost 59 per cent twelve months later, which is no surprise given the changes to tax rules announced in the interim which have prompted many landlords to reassess their finances.”
House purchase lending hit £8.4bn in January, down 25 per cent month-on-month but up 12 per cent year-on-year. They took out 46,200 loans, down 27 per cent on December but up 5 per cent on January 2015.
First-time buyers borrowed £3.3bn in January, down 27 per cent on December 2015 but up 14 per cent on January last year. This totalled 21,400 loans, down 28 per cent month-on-month but up 6 per cent year-on-year.
Home movers borrowed £5.1bn, down 24 per cent on December but up 11 per cent compared to a year ago. This amounted to 24,800 loans, down 26 per cent month-on-month but up 3 per cent on January 2015.
The CML has also started publishing seasonally-adjusted monthly data to make it easier to spot underlying trends.
CML director general Paul Smee says: “We are now pleased to be able to analyse monthly lending on a seasonally adjusted basis.
“While the unadjusted data appears to show large falls in January compared to December, stripping out the usual January lull we see a general picture of flat house purchase lending but a significant uptick in remortgage activity, as borrowers continue to seek attractive new deals despite the lower-for-longer expectations for interest rates.”
Former RICS chairman and estate agent Jeremy Leaf says: “The January CML figures give us a taste of what is to come in the housing market over coming months. What we are seeing on the ground is people taking advantage of mortgage rates while they are low. With a relatively low number of transactions taking place, lenders are having to make up their numbers somewhere and are offering a plethora of attractive remortgage deals.
“There is already a softening in house prices as investors have brought forward their buying decisions from the second quarter of the year to the first quarter. It remains to be seen after the EU referendum whether they will shake off the concerns they have about the market in the third quarter.”