The number of buy-to-let mortgages being handed out has shot up by nearly 40% over the last year, according to figures from lenders.

A total of 22,200 buy-to-let loans with a collective worth of £3.4 billion were handed out in August, marking a 37.9% increase on the number of loans made in August 2014, according to the Council of Mortgage Lenders (CML).

The figures show that around £1.4 billion buy-to-let loans were for house purchase, while the bulk of the loans, at just under £2 billion worth, were re-mortgage deals.

The overall value of buy-to-let loans being made for house purchase increased by 40% year-on-year in August, compared with an 8% year-on-year increase in the total value of mortgages being given to home movers, which stood at £7.1 billion in August.

The CML said that buy-to-let lending for house purchase has shown stronger year-on-year growth than home owner loans for house purchase for most of the year.

This is in part due to a market recovery, as buy-to-let lending shrank back faster than lending to home owners during the financial downturn, it said.

Buy-to-let lending now accounts for just under a fifth (17%) of all mortgage lending, according to the CML's figures.

There have been suggestions that the pension freedoms introduced in April which give people aged 55 and over more flexibility over their money might encourage some people to invest in the buy-to-let market.

Continued strong demand from tenants in the rental sector and signs that the housing market is still on the up could make buy-to-let an attractive option for some investors.

But in the summer Budget, the Government announced that landlords will see their tax breaks restricted.

Wealthier landlords receive tax relief at 40% and 45% - but this tax relief will be restricted to 20% by April 2020.

From April 2016, a ''wear and tear allowance'', which allows landlords to reduce the tax they pay, regardless of whether they replace furnishings in their property, will also be replaced by a new system that only allows them to get tax relief when they replace furnishings.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said there are many attractive buy-to-let mortgage deals available.

He said: "'Fixed rates on buy-to-let mortgages have moved below 2% for the first time - a phenomenally low rate which will be attractive to landlords keen to keep costs down since the changes to mortgage interest tax relief announced in the summer Budget.

"Buy-to-let lending saw considerable year-on-year increases and the attraction of the sector is undiminished, even if landlords may think twice in the future before investing to ensure the numbers add up."