Buy to let mortgage lending fell for the three months to April, for the sixth consecutive quarter according to the Council of Mortgage Lenders. Buy to let lending accounted for £2.1 billion, 6% of all mortgage lending over the period, down from £4 billion in quarter 4 last year and £9.5 billion 12 months ago.
Recent research has also indicated that borrowers who are active have much less choice as the number of buy to let mortgage deals has reduced by 95% in two years.
The drop to around 200 products is a direct result of the credit crunch forcing some lenders to withdraw from the market altogether, and those that remain to streamline their portfolio.
Those lenders that remain will also apply stricter qualifying criteria, reducing the maximum loan from 90% of the property value, back to the more traditional 75%, and demanding higher rental incomes to support the mortgage. This has left some existing landlords with little choice on remortgaging, and those that still qualify, having to weigh up arrangement fees as high as 3.5% of the loan.