Buy-to-let mortgages drop by 95%
The number of buy-to-let mortgages on the market has fallen by 95 per cent in the last two years.
Research by moneysupermarket.com shows two years ago there were 4,384 buy-to-let mortgages on the market, compared to 213 now.
As lenders have tried to edge away from risk, the buy-to-let market has suffered.
Currently there are no buy-to-let mortgages left at 85 per cent loan-to-value, meaning prospective landlords will need at least a 25 per cent deposit to secure a mortgage - meaning only cash rich investors can take advantage of falling house prices.
Buy-to-let landlords have also suffered as the average rate for mainstream mortgages has reduced by 2.6 per cent since last summer, while buy-to -et rates have only fallen by 1.51 per cent.
Louise Cuming, head of mortgages at moneysupermarket, said: "The credit crunch has killed off the majority of buy-to-let deals, because banks view buy to let borrowers as riskier than normal customers, the deals that are still available require an extra large deposit."
She added those with a sufficient deposit and have found a suitable buy to let mortgage must watch out for the high fees.
"On top of all this, banks are also increasing the minimum rent they require landlords to charge," Ms Cuming said.
The levels of rent in relation to mortgage repayments have also increased - despite average rents falling from £873 a month in April 2008, to £819 now.
In 2007 the average requirement was for the rent to represent 112 per cent of the mortgage payment. The average requirement now is for rent to cover 123 per cent of the mortgage payment.
"The buy to let mortgage market is like a ticking time bomb; the uncompetitive nature of the products on offer does not reflect the need in the market from current landlords, and if nothing changes, this is a sector of the market that will continue to suffer," Ms Cuming concluded.
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