Banks are starting to cut the number of buy-to-let loans for new purchases with an almost 20 per cent drop in new mortgages for the first six months of the year.
The figures from the Council of Mortgage Lenders has shown that from the high of 176,500 for new mortgage approvals for the second half of 2007, it has dropped to 144,600 as new stricter lending criteria comes into force.
The tightening of the lending criteria, just like in the home owner mortgage market, is starting to hit those potential landlords with smaller deposits and low rental cover.
The average maximum loan-to-value of 83 per cent is down from the 85 per cent from the corresponding period last year.
The main problems for BTL landlords will be remortgaging costs when about 5,000 landlords a month, come off cheap two year fixed deals, for the remainder of the year.
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