The level of buy-to-let borrowing was down 7% between August and September as the introduction of the 3% stamp duty surcharge on additional homes continues to hit landlords hardest, according to the latest seasonally adjusted monthly figures compiled by the Council of Mortgage Lenders (CML).

The data showed that the amount buy-to-let landlords borrowed also fell on an annual basis, dropping 22% year-on-year to £2.8bn with the number of loans falling 6% from August to 18,200 and representing a decline of 26% on September 2015.

“Six months on since the stamp duty changes on second properties and buy-to-let continues to operate at lower levels than a year ago,” said Paul Smee, director general of the CML.

“But lending for buy-to-let house purchase and remortgaging has settled at its current level over the last four months,” he added.

It may take a long time to see the resurgence in mortgage lending needed to bring the buy-to-let market back to where it was before stamp duty changes took effect, not least because landlords are also being targeted with tougher affordability criteria, according Steve Bolton, founder of Platinum Property Partners.

He commented: “The fall in purchase loans suggests many landlords are holding back from expanding their portfolios. With punitive tax changes on the horizon for 2017, this trend will only become more pronounced. The unfortunate knock-on effect for tenants is rents will become more expensive as the supply of suitable rental accommodation is constricted.”

Remortgaging hit £5.5bn in September, down 7% on August but up 8% compared to September last year. This represents 31,500 loans, down 10% month-on-month but up 2% year-on-year.

“It is encouraging to see that remortgaging figures are continuing to rise on an annual basis,” said Jeremy Duncombe, director, Legal & General Mortgage Club.

“These figures show that borrowers are beginning to regain control of the housing market and make it work for them, as they continue to take advantage of the record low base rate,” he added.