Fewer landlords are buying properties to rent with buy to let mortgages, according to the latest figures from lenders.
Trade body UK Finance says buy to let mortgages to purchase a home dropped by 10% during May this year compared with May 2017.
Just 5,500 properties were added to landlord portfolios.
The amount borrowed was down, too, with lenders advancing £700 million – a drop of more than 22% on the amount advanced in May last year.
However, the buy to let remortgaging trend is still rising, with landlords completing 14,600 loans during May.
This came to a total loan value of £2.3 billion – 15% up on the same time last year.
But UK Finance director of mortgages Jackie Bennett believes the worst is still yet to come in the buy to let market.
“The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity,” she said.
“Purchases in the buy-to-let market continue to be constrained by recent regulatory and tax changes, the full impact of which have yet to be fully felt.”
Estate agents also consider house sales are in decline – reporting for the 16thmonth in a row that the number of agreed sales are decreasing.
But more worryingly, they feel new instructions to rent buy to let homes have fallen by a more than a fifth to 22% – the 21stconsecutive month of decline.
“While it is understandable that the government wanted to provide a lift for first time buyers, this may well come at the cost of higher rents as the appeal of buy to let diminishes because of the changing tax treatment of investment properties,” said Royal Institution for Chartered Surveyors chief economist Simon Rubinsohn.