The number of buy-to-let mortgages used for purchasing new properties fell by nearly 8 per cent in February compared to the same month last year, according to the latest UK Finance figures.
The trade body says that only 4,800 BTL purchase loans completed, compared to 5,200 in February 2018.
The value of these mortgages for landlords was £600m, down slightly from £700m a year earlier.
UK Finance says that “while BTL house purchases continue to contract due to tax and regulatory changes, BTL remortgaging has increased as borrowers move from fixed rate mortgages and lock into new attractive rates”.
Its figures show that 14,400 BTL remortgages completed in February, up 2 per cent from 14,100 in the same month last year.
The value of BTL remortgages was £2.3bn, up from £2.2bn a year earlier.
The number of mortgages for first-time buyers rose by 4 per cent year on year to 24,880 while the value of these loans rose by 6 per cent to £4bn.
There were 18,200 new remortgages with additional borrowing in February 2019, 10 per cent more than in the same month in 2018.
For these remortgages, the average amount taken out in February was £52,000.
There were 18,360 remortgages for borrowers who did not want to increase their loan size, a rise of nearly 8 per cent on the same month last year.
MT Finance director Tomer Aboody says: “It is no surprise that BTL numbers are extremely low with just under 5,000 new purchases in the month, considering the tax and regulatory changes which have hit the sector.
“Landlords are taking advantage of cheaper rates on BTL loans and remortgaging while looking at the commercial space to make further investments where regulations are softer.
“With news of further tenant protections being introduced with regard to evictions, landlords are uneasy and increasingly uncomfortable with traditional BTL.
“The retreat of landlords from the market is producing more opportunities for FTBs, as the government intended.”
SPF Private Clients chief executive Mark Harris says: “Swap rates, which have been on an overall downwards trajectory since the start of the year, have been rising in the past couple of weeks but borrowers need not panic as lenders have so far not repriced their mortgages higher.
“Borrowing remains extremely cheap so for those who want to take the plunge and buy their first home, or move up the ladder, so it is a good time to do so.”