The buy-to-let market could be experiencing unsustainable growth and a collapse could be imminent according to Lord Lamont.

Lamont, who was Chancellor of The Exchequer under John Major during the last major recession in the early 1990s, urged ministers to remain wary of an inevitable rise in interest rates and the effect this will have on both lenders and buyers.

Lamont said: "The Bank and the government need to keep a careful eye on the buy-to-let market. This is expanding very rapidly at the moment and it was an over-rapid expansion of it before that caused the demise of Bradford & Bingley."

Currently the number of landlords taking out mortgages for buy-to-let properties now accounts for more than one tenth of all mortgages being issued. 

The ‘boom’ has come from very low interest rates as well as the Bank of England's promise not to raise interest rates until employment reaches 7%, though it has been predicted this will not happen until 2016.