Mortgage lending for buy-to-let house purchases fell by around a fifth annually in September as the market remains subdued, a trade association has reported.
Lending to first-time buyers and home movers was also down compared with a year earlier – while re-mortgaging plateaued, UK Finance said.
Some 5,200 new buy-to-let home purchase mortgages were handed out in September, marking an 18.8% decrease on the same month a year earlier.
There were 29,400 new first-time buyer mortgages completed in September, 4.5% fewer than in the same month a year earlier.
And a further 29,400 new home mover mortgages were completed – 8.4% down compared with September 2017.
Meanwhile, 35,600 new home owner re-mortgages were completed in September, edging down 0.6% on the same month a year earlier.
And there were 12,300 new buy-to-let remortgages completed, slightly down by 0.8% on September 2018.
Buy-to-let investors have faced various tax changes in recent years, including a stamp duty hike on the purchase of second homes.
Jackie Bennett, director of mortgages at UK Finance, said re-mortgaging for both residential and buy-to-let properties has levelled out after a period of strong growth.
She said: “This reflects the number of fixed-rate loans reaching maturity.”
Ms Bennett continued: “Buy-to-let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of recent tax, regulatory and legislative changes.
“Demand for house purchases for both first-time buyers and home movers has also lessened, as affordability constraints continue to bear down on consumer demand for new loans particularly in London and the South East.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “Buy-to-let investors are still not returning to the market or buying for the first time in sufficient quantities to provide support at the bottom end of the market and first-time buyers are not taking up the slack.
“The result is a bit of a standoff until clearer political and economic direction becomes apparent.”