Figures from the Council of Mortgage Lenders show new BTL lending fell for the sixth consecutive quarter in the first three months of this year, accounting for 6 per cent of gross mortgage lending in the first quarter, down from 12 per cent a year earlier.
The CML says there were 22,400 new BTL mortgages in the first quarter of 2009, down from 38,000 in the final quarter of 2008 and 72,400 one year ago.
By value, BTL gross advances totalled £2.1bn in the first quarter, down from £4bn in Q4 and £9.5bn in Q1 last year.
The CML also found that 3.09 per cent of buy-to-let loans were in arrears of three months or more at the end of the first quarter, up from 2.31 per cent at the end of 2008. A total of 1,700 buy-to-let repossessions took place in Q1, the equivalent of 0.15 per cent of all buy-to-let mortgages, up from 900 in the first quarter of last year.
CML director general Michael Coogan says: “Many buy-to-let lenders relied on wholesale markets rather than retail savings to fund their lending. This, along with general housing market weakness, has influenced the decline in buy-to-let lending.”