A buy to let lender say tax changes announced by Chancellor George Osborne has set off a stampede for corporate borrowing.

From April 2017, landlords paying tax at a higher rate will start to lose mortgage interest relief and see a new way of working out tax on rental income rather than profits.

Buy to let mortgage lender Kent Reliance says that corporate mortgage applications shot through the roof straight after Chancellor George Osborne announced the tax changes in his Summer Budget.

By September, the number of mortgage applications flooding into underwriters surged by more than 200% to an average 5,000 a month.

Now, around 25% of all funding is advanced to buy to let companies, compared with around 13% a year ago.

The lender expects to advance between 55,000 and 60,000 mortgages to companies next year.

This is 20% more than in 2015 and an increase of 90% compared to 2014.

Even more applications from buy to let companies are expected if the Chancellor implements the expected stamp duty discount exempting companies from the 3% surcharge he is imposing on private property investors.

The Treasury is currently consulting on whether to allow the stamp duty exemption for companies.

 “The Chancellor has trained his sights on buy-to-let, given the sector’s rapid rise in value, but the changes to the tax treatment in the last six months will bring unintended consequences,” said a spokesman for the lender.

“First, the rush to put properties inside a limited company will be sustained, especially if larger scale investors are indeed exempted from the new stamp duty surcharge. Secondly, the buy to let market will see activity hit overdrive between now and April as landlords seek to beat the stamp duty deadline.”

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