Buy-to-let mortgage activity slowed dramatically in September, as the number of landlords taking out new home loans dropped by almost a fifth, owed largely to regulatory and tax changes.

Landlord investors took out just 5,200 new buy-to-let mortgages for acquiring properties in September, down 18.8% on the corresponding month in 2018, while the total value of BTL loans dropped by 22.2% to £700m, according to the latest figures from UK Finance, the industry body.

Fewer buy-to-let investors are actively looking to invest following the stamp duty and income tax crackdown, resulting on a squeeze on many landlords’ profits.

Jackie Bennett, director of mortgages at UK Finance, said: “Buy-to-let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of recent tax, regulatory and legislative changes.”

Meanwhile, there were 12,300 new buy-to-let remortgages completed in September, marginally down by 0.8% on September last year.

Bennett added: “Overall remortgaging for both residential and buy-to-let properties have levelled out after a period of strong growth. This reflects the number of fixed rate loans reaching maturity.”

At the start of the year, UK Finance had predicted £12bn of buy-to-let lending for residential property acquisitions in 2018, but with tax changes eroding landlords’ returns, fewer people are investing in the buy-to-let sector, and as a result, Bennett estimates that lending will likely hit just £9bn this year.