Buy-to-let lending will reach £25bn by the end of 2014, a 25% increase on 2013, it has been forecast.
Specialist broker Mortgages for Business says that buy-to-let lending is already 135% higher than the trough in 2009 of £8.5bn.
However, even with a big increase next year, it will still be way below the 2007 peak of £45bn.
In separate research, Mortgages for Business polled 278 property investors and found that nearly three-fifths of landlords (57%) intend to expand their portfolios over the next six months.
The findings also showed that the landlords with the most properties already in their portfolio are the most likely to expand in early 2014.
Of landlords who already own between one and ten properties – often classed as part-time landlords – 54% intend to expand over the next six months. Of those with more than 11 properties – traditionally seen as professional landlords – 66% intend to bolster their portfolios in the New Year.
Overall, nearly two-thirds of landlords (64%) who intend to expand will need to refinance in order to fund this expansion.
Nearly three-fifths (59%) of part-time landlords say they will need to refinance to fund their expansion, while nearly three-quarters (72%) of professional landlords will need to refinance.
Only 7% of all landlords say they intend to shrink their portfolios over the next six months.
Investment in ‘vanilla’, or standard, residential buy-to-let property will expand most, with 84% of landlords intending to target these properties.
Among the more complex property investment options, the most popular property types are Houses in Multiple Occupation – 20% of investors intend to purchase HMOs – and Multi-Unit Freehold Blocks, with 14% intending to buy these property types.
Fewer investors plan to buy semi-commercial property (11%) and commercial property (9%).
Despite the sentiment towards expansion and the large proportion of landlords needing to refinance in order to do so, over two-thirds of property investors feel lenders could do more to support them.
By far the biggest challenge that landlords say they face from lenders is their lending criteria, 60% of investors feel lenders need to ease their criteria to support the market.
Specifically, investors would like to see lenders remove non-property related income requirements, increase the LTV threshold and increase the number of products available at higher LTVs as well as reduce the amount of computer-based lending decisions.
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