But despite the improvement, the figure was still the second lowest since records began in 2006 and well down on the peak of £12.4bn lent during the third quarter of 2007. There was also a 10pc increase in the number of buy-to-let mortgages advanced during the three months, at 23,700, up from 21,600 during the previous quarter.
 

It said landlords with less than a 20pc equity stake in their property were being forced to stay on their lenders’ revert rate when their existing deal came to an end, although it added that, with interest rates remaining low, this was relatively painless for them.

There was a slight increase in the number of buy to let properties that were repossessed by lenders during the third quarter, with this rising from 1,400 to 1,600, the equivalent of 0.14pc of all buy-to-let loans.

But there was a 32pc fall to 1,700 in the number of properties that had a receiver of rent appointed – an alternative to repossession that enables tenants to stay in their home.

The number of landlords who were in arrears also fell for the third quarter in a row, with 20,500 people in arrears of at least 1.5pc of their outstanding mortgage at the end of September, down from 22,900 three months earlier.