Lenders are reducing their exposure to buy-to-mortgages by cutting down on maximum loan amounts and withdrawing many competitive rates.

Bank of Scotland, BM Solutions and The Mortgage Business, all part of the HBOS group, reduced the maximum loan-to-value they will offer on new-build rental flats and apartments, including newly converted properties, from 85 per cent to 75 per cent. They also removed many of their best fixed and tracker mortgage deals.

The changes bring these providers more into line with others that have already pared back lending on new build flats.

Some building societies have already stopped offering buy-to-let mortgages with others planning to follow suit. Nationwide and Chelsea Building Society have stopped lending in this area, while Abbey has temporarily withdrawn from the market through intermediaries. Other lenders have cut their maximum loan-to-values to 50 per cent on new build flats.

"Everyone has been showing a much reduced appetite in this area due to issues around the transparency of builders' incentives, the real value of the properties and major fraud," said David Hollingworth at London & Country Mortgages.

Figures released yesterday by Moneysupermarket.com, the comparison website, showed the number of buy-to-let loans had fallen from 4,025 to 674 in just one year, with nearly 600 of these products being removed since the end of March.

The buy-to-let market has slowed down considerably since the credit crunch with lenders asking for deposits of at least 25 per cent. Mortgage brokers said it was now getting very difficult for property investors to access this area of the market.