The buy-to-let mortgage market will continue to grow despite a swathe of Government crackdowns on the sector, experts say.

Last week the Prudential Regulation Authority published a consultation paper proposing to strengthen buy-to-let underwriting standards by insisting on a minimum level of stress testing to ensure loans remain affordable when rates rise. The Bank of England’s Financial Policy Committee is also expected to bring in new rules for buy-to-let underwriting soon.

From 2017, relief for BTL landlords will be gradually cut to 20% from the present 40 or 45%. In his 2015 Autumn Statement the Chancellor added a 3% surcharge to stamp duty for BTL properties, starting from April.

Hometrack director of research Richard Donnell says the Government changes might temporarily stifle demand but will not hobble the buy-to-let market in the long term. He says: “Buy-to-let will remain the future of the housing market but all these changes will slow the rate of growth in lending. In terms of the home purchase side of buy-to-let, there will be a year or two of consolidation where potentially we will see volumes fall back a little bit.”

But Donnell says BTL investors will continue to be drawn to the profitability of the sector. “One of the strongest underpinning factors has been the fact that you can get a 5 or 6% yield from a BTL property.”