Remortgage gives BTL year-on-year boost

But it was up on May last year, reflecting increased levels of remortgage activity in the buy-to-let sector seen since the beginning of the year.

Buy-to-let continues to grow year-on-year, mainly driven by remortgage activity, but also saw a slight month-on-month increase due to higher buy-to-let house purchase lending activity.

Paul Smee, director general of the CML, commented:

"House purchase lending in May was slightly up on the previous month, suggesting the market might be waking up after a subdued first quarter. Activity has broadly been down on last year but we expect it to rise in the summer months as, with historically low interest rates and a competitive lending environment, borrowing conditions are relatively favourable. But we cannot ignore the continuing affordability constraints caused by high house prices relative to earnings which will work in a contrary direction."

Mark Harris, chief executive of mortgage broker SPF Private Clients, says:

"Buy-to-let continues to perform well, with lending up on both new purchases and remortgaging. Lenders like buy-to-let as it is easier to underwrite than residential borrowing because it is not affected by MMR and there are better margins. It remains to be seen whether the recent changes to claiming mortgage interest relief and the wear and tear allowance will have a negative impact on the sector. Remortgaging has been particularly strong and we expect this to be the case in coming months as borrowers critically assess their investments and look at ways of maximising their profits. We expect the majority of investors will still consider buy-to-let to be a good investment and carry on regardless."