Woolwich, the mortgage arm of Barclays, will increase rates for buy-to-let investors from today.

Landlords will have to pay a 1 per cent fee, equivalent to £1,500 on a £150,000 loan, to be put on a Woolwich standard variable rate (SVR). It also added up to 0.7 percentage points to the cost of a tracker rate loan and scrapped two-year fixed rates from its buy-to-let range.

Brokers said the changes were a sign that lenders no longer wanted to attract novice investors, but added that the new fee would also hit established investors with a Woolwich mortgage. Many landlords are trapped with their current bank because harsher lending rules have made it almost impossible to obtain finance from other lenders.

Melanie Bien, director of the independent mortgage broker Savills Private Finance, said: “Woolwich’s combination of hiking rates substantially on some deals, introducing a large fee for the SVR and scrapping its two-year fix sends out an unequivocal message — that it is reining back from buy-to-let and does not want new business.”

The move comes as Bank of Scotland, BM Solutions and the Mortgage Business withdrew buy-to-let deals from the market. The banks are expected to announce a more expensive range of loans today.

GMAC-RFC, a specialist buy-to-let lender, announced 280 job losses yesterday soon after it pulled all its buy-to-let deals from the market.

Lenders have become increasingly demanding of buy-to-let customers over recent months, increasing the amount of rent required to cover the loan and raising the minimum deposit from about 15 per cent to 25 per cent.

Experts said the Woolwich changes could cause a vicious circle for landlords, as rising rates put pressure on lenders to demand that landlords receive higher rents on their properties. They could make it harder for investors to find good value deals, putting pressure on other lenders to withdraw from the market or raise rates.

John Saville, a land and sales director for Spicerhaart, said: “The rental coverage demanded by lenders has increased recently and, as rates go up, that coverage will get higher, so it’s a double-edged sword.”

A spokesman for Woolwich said: “Our products remain competitive. We made the changes to help to limit the flow of business.”