Buy-to-let mortgages are becoming increasingly harder for professional landlords to secure, Paragon Mortgages has revealed.
Research has found that 54 per cent of professional landlords have attempted to secure a buy-to-let mortgage for either remortgage or new purchase purposes in the three months leading up to the end of August.
However, almost nine out of 10 of these landlords have admitted it is now harder to secure a mortgage than it was in the previous three months.
Research by Moneyfacts.co.uk has found that the availability of buy-to-let mortgages has taken a hit since May, with 192 products available at the end of August compared to 218 in May, in contrast to the residential market where availability has improved slightly.
Commenting, John Heron, Paragon Mortgages' managing director, said: "Product availability in the general mortgage market has improved slightly in recent months, but has worsened for the buy-to-let market.
"Mainstream lenders are reducing their focus on this sector and specialist lenders are still unable to access the wholesale funding markets to enable them to offer new products."
Mr Heron is concerned that as a result of the fall in buy-to-let lending, "the private rented sector could start to contract, particularly if the ‘accidental landlord' begins to sell property", which he believes would be "disastrous for those sectors of the population that rely on the private rented sector for their housing needs".
He added: "The Government has already taken steps to increase liquidity in the lending markets but these have had limited success. It is imperative that more steps are taken to improve confidence in and access to the wholesale funding markets."
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