The City watchdog has weighed into the controversy over Britain’s booming buy-to-let market, revealing that it has uncovered a number of instances of buyers lying to bank lenders.

The rise in property prices over the past 10 years has encouraged a growing number of investors to buy rental properties. Last year saw a record 330,300 new mortgages taken out by landlords, a 57 per cent jump on the previous year, despite falling rental returns on such properties.