The global liquidity crisis has pushed the number of available buy-to-let mortgages into insignificance.

Research by price comparison site MoneySupermarket.com showed the number of available mortgages in the sector fell from 4,384 to 307 in the past year as lenders tightened criteria and removed certain products.

And those buy to let mortgages still remaining are characterised by higher interest rates.
Louise Cuming, head of mortgages for MoneySupermarket.com said: "These are worrying times for tenants, landlords and developers. With the cost of living spiralling out of control, tenants are unlikely to be willing to wear increased rental demands."

The average rate for 75 per cent loan-to-value (LTV) buy to let products increased by 0.35 per cent to 7.33 per cent over the past year. This was accompanied by a 0.63 per cent rise in 85 per cent LTV products to 7.46 per cent.

The increased interest rates meant landlords would be forced to increase rents or find the shortfall themselves. For example, on a £100,000 interest-only mortgage, the rent needed to cover the interest on the mortgage had increased from £569 to £622 pounds.

"Those landlords wishing to remortgage buy to let properties will find it difficult, with lenders demanding sizeable deposits or charging higher rates," Ms Cuming said.

"This could force landlords to re-evaluate whether it is worthwhile staying in the sector in the current climate.

"With property prices falling though, there may well be many landlords having to sell their investment at a loss."