House purchase approvals were up 20% between December and January, fuelled by the buoyant buy-to-let sector.

Mortgage Solutions yesterday said, The January Royal Institution of Chartered Surveyors (RICS) survey reported a surge in new instructions in January with buy-to-let investors rushing to get into the market ahead of the 3% Stamp Duty hike, intensifying price rises despite higher levels of supply.

Against concerns landlords are scaling back portfolios or selling up altogether, RICS said indicators point to further rent and house price inflation.

The surveyor trade body reported that in January, 74% of its respondents expected an increase in buy-to-let purchase, particularly in London where supply rose dramatically.

RICS said: “As activity in the housing market gathers pace overall, agreed sales have risen over the month at the fastest pace since April 2014. The picture across the UK is mixed but most areas have seen a rise in sales since the start of the year and further increases are expected.

Chartered surveyor E.Surv also noted that total purchase approvals in January hit a nine-year high, with 85,432 house purchase approvals. This was up a significant 20.6% from 70,837 house purchase approvals in December, and up 39.3% over the last year.

After a consistent run of annual increases, this yearly spike in house purchase lending signals the short-term impact of a surge in buy-to-let borrowing. This has happened at the same time that the overall lending market is also performing strongly, boosting total lending.

Richard Sexton, director of e.surv chartered surveyors, said: “Concerns about the sector’s growth have sparked a wave of legislation but as Stamp Duty changes come into effect this April, there’s been a rush to get buy-to-let loans approved. Many have predicted a narrowing of the buy-to-let sector but actually what we’re seeing in lending quarters appears to be the opposite.”