Bradford & Bingley (B&B) has slashed its lending to landlords, amid claims that the troubled bank is struggling to make profits on its new loans.

Britain’s biggest buy-to-let lender, with a £23 billion book of loans, has pulled its Mortgage Express range from Moneyfacts, the financial website that is used by potential borrowers to compare interest rates.

A B&B spokeswoman said that the loans were still available from a select group of mortgage brokers. “More than 90 per cent of intermediaries can still deal with us,” she said. “This is just so we can better manage our distribution model. It’s about managing volume flow and improving credit quality.”

However, a mortgage broker with access to Mortgage Express products said that interest rates on the mortgages had risen sharply. “It’s been increasingly evident in the past few weeks that they’re trying to price themselves out of customers’ range. They don’t compare well with any other provider,” the broker said.

Mortgage Express is offering a three-year fixed-rate mortgage at 7.24 per cent for buy-to-let customers with a 25 per cent deposit. Leeds Building Society is offering loans for the same term at 6.79 per cent, as well as accepting a lower deposit.

B&B has been increasing rates on its owner-occupier mortgages for the past six months, along with the rest of the market. Yesterday the bank’s two-year fix was priced at 7 per cent, on top of a £999 fee. First Direct, another mortgage provider, demanded a higher fee but was offering a rate of 5.98 per cent.

Analysts from Deutsche Bank said yesterday that B&B would struggle to make profits from mortgage lending while question marks remained about its long-term survival. The bank is raising £400 million in a 55p-per-share rights issue, but there are doubts about whether its business model, which centres around buy-to-let and self-certified mortgages, can survive the credit crunch.

Jason Napier, a Deutsche Bank analyst, said that B&B’s own cost of borrowing was rising because of concerns about its creditworthiness, making it difficult for it to make money from lending to customers.

On June 2, B&B had a £2 billion undrawn funding facility, sufficient to fund the bank for the remainder of the year.

Deutsche Bank yesterday gave a revised price target of 20p for the bank’s stock — the value likely to be put on the shares by an acquirer, Mr Napier said. Shares in B&B jumped yesterday by more than 27 per cent to 43¼p on the back of rumours that the Financial Services Authority was planning a tougher crackdown on short-selling.

Under the terms of the rights issue, B&B’s high street rivals, as well as four British fund managers and two investment banks, will end up owning large stakes in the bank. There is speculation that could leave it vulnerable to a takeover bid.

Bankers are split on whether the bank will attract a cut-price offer soon after the rights issue is completed. One said that buyers may be attracted by the bank’s £21 billion book of retail deposits and its 197-branch network. “But they won’t come remotely near 55p,” he said. “It’s going to be a filthy cheap deal, or nothing.”

Other bankers said that potential acquirers were likely to hold off until later in the year. “Things are moving so quickly, it’s hard to know where arrears are going to go,” one said. “In six months’ time it might be OK but you’d be brave to move now.”

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