New investment in the buy-to-let market has fallen by £20bn in two years as the lethal combination of tighter tax and mortgage rules has begun to take its toll on landlords.
Figures released yesterday by IMLA, the mortgage broker trade body, show that the value of new money raised to invest in buy-to-let properties has fallen by 80pc, from £25bn in 2015 to just £5bn in 2017.
In that period, a series of reforms have had a punitive effect on landlords. The stamp duty surcharge on additional properties was introduced in 2016, making expanding a portfolio more expensive, and the phased removal of mortgage interest relief which began last year has also squeezed profits.
Meanwhile some landlords now face an uphill battle getting mortgages at all, thanks to changes to lending restrictions ushered in by the Prudential Regulation Authority, a part of the Bank of England, at the tail end of last year.
There are currently 4.5 million people living in the private-rented sector and, IMLA warned that if demand continues to increase at current rates the crackdown on landlords may force average rents upwards.