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Sharp fall in buy-to-let mortgage products

There has been a significant decline in the number of buy-to-let mortgage products, with 74 deals withdrawn from the market last month, marking the steepest reduction in product numbers since March 2009, according to the latest data from Moneyfacts.

With tougher affordability rules having come into play on 1 January and more changes due in September, Charlotte Nelson, finance expert at Moneyfacts, is not surprised to see that the buy-to-let market has taken a hit.

“With the new rules reducing the amounts landlords will be able to borrow, it is little wonder that the 75% loan-to-value sector has seen the largest reduction in product numbers, falling from 606 to 540 in just one month,” she said.

Jan-16

Jul-16

Dec-16

Jan-17

Total number of live BTL products

1,256

1,402

1,482

1,408

Source: Moneyfacts

In addition to more stringent affordability conditions, the fact that there will be major changes to the way in which rental is taxed from April may also explain why many lenders are withdrawing products, according to Nelson.

She added: “Lenders are perhaps withdrawing products to get back to just their ‘core’ range in an attempt to wait and see what other providers will be doing in the run up to April.

“2017 is set to be an uncertain year, which could be a lethal cocktail for landlords, particularly now there are less products on the market. Anyone unsure about their options should seek out a financial adviser.”