Imposing lending restrictions on the BTL mortgage market could have damaging consequences for landlords and the supply of rental properties, warns Landlord Assist.

The tenant eviction and rent recovery firm is warning landlords that changes to the mortgage lenders conditions could make it more difficult to find a BTL loan or to re-mortgage an existing deal.

The Bank of England recently told banks not to give more than 15% of new home loans to home buyers borrowing more than 4.5 times their annual income. It also told lenders to perform stricter tests to ensure borrowers can repay their loans when interest rates start to rise.

Although lending in the buy-to-let market wasn’t covered by the tougher rules announced by the Bank of England, it is believed that the rental sector is to be closely monitored to ensure private landlords don’t take on debts they may struggle to repay.

Graham Kinnear, managing director at Landlord Assist says: “There is a strong and growing rental sector and there is a clear need for the amount of available property to rent to increase to meet this growing demand. Making buy to let borrowing more difficult could have the reverse effect and leave the market in a painful cycle of increasing rents and reduced choice.”