Overall house purchase approvals hit their second highest level in over two years in February, totalling 72,799, according to e.surv, easily beating their six-month average of just over 71,000.

The chartered surveyor said that this strong borrowing trend was fuelled by April’s Stamp Duty hike, as well as looming regulation that will hit buy-to-let borrowing from the end of March.

The new Mortgage Credit Directive could see tougher mortgage application rules, a more arduous application process and harsher means testing for some landlords.

Richard Sexton, director of e.surv chartered surveyors, said: “The clock is ticking for buy-to-let investors. Over the next couple of months, Stamp Duty and the Mortgage Credit Directive could both make their mark. February lending reflected this, powering last month’s overall strong performance.”

Jump in small-deposit lending

February saw an increase in small-deposit lending (to buyers with a deposit worth 15% or less of their properties’ total value), with 11,429 of such loans granted approval, 5.7% higher compared to 10,814 the month before – and 9.1% up on the previous year.

The proportion of small-deposit lending also increased, as small-deposit borrowing accounted for 15.7% of overall house purchase loans granted – up from 14.5% the previous month.

Northern Ireland led the rest of the UK in terms of the proportion of small-deposit lending in February– which stood at 29% for the month. Across the rest of the UK, it was a mixed picture, with most regions seeing the same 1 percentage point rise as the UK average – which climbed from 15% to 16% across January and February.