Buy-to-let investors are finding it increasingly difficult to get mortgages, it has been claimed.
The executive chairman of Bradford & Bingley has claimed that the UK's buy-to-let mortgage market is now closed. Richard Pym told a committee of MPs that the number of deals available for buy-to-let investors has declined dramatically over the last 12 months and it is becoming increasingly difficult to secure finance.
He made his comments during a treasury committee banking inquiry hearing, during which MPs grilled the board of the nationalised bank over the events that led to the institution's collapse in September.
"Essentially the buy-to-let market in the way that we would have known it a year ago is now closed," Money Marketing quotes. "Most of the lenders who were active have now withdrawn all their products."
Bradford & Bingley closed its own doors to new mortgage borrowers almost two months ago. Prior to the move, it had been the UK's largest provider of buy-to-let mortgages, with such deals accounting for 60 percent of its total mortgage business.
Mr Pym also said the proportion of Bradford & Bingley's customers who were in arrears on their mortgages at the end of September stood at three percent, which is higher than the industry average.
His comments come as the credit ratings agency Standard & Poor's is predicting that up to 40 percent of landlords could fall into negative equity by the middle of 2009 if house prices lose between 25 and 30 percent of their peak value.
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