Buy-to-let activity surged 12.7% in August as the sector successfully absorbed the Government’s 2015 policy changes and enjoyed a post Brexit bounce, according to research from Connells Survey and Valuation.

Changes to the tax treatment of the buy-to-let sector looked to be choking off activity in 2015 and early 2016. Although the restriction of tax relief on mortgage finance costs to basic rate tax only, the removal of 10% ‘wear and tear’ allowance, and the introduction of additional 3% stamp duty surcharge hit the sector following the 2015 budget and the last Autumn statement, the August rebound suggests the Government’s changes are set to have been a short term problem for the sector.

John Bagshaw, corporate services director at Connells Survey & Valuation, commented: “Now the effects of the Government’s legislation have been digested by lenders and investors alike, buy-to-let activity has increased sharply. The market’s fears over the impact of Brexit are calming and the Bank of England’s decision to cut the base rate last month for the first time in seven years may also have a psychological impact on property investors.

“August’s surge in activity highlights the resilience of the buy-to-let sector.”