Abbey has stopped selling buy-to-let mortgages to landlords, blaming "recent market moves" for a raft of measures announced today that will also penalise some residential borrowers.

The bank said that it had temporarily withdrawn from the buy-to-let market to concentrate on its residential mortgage business.

However it also introduced stricter lending rules for homeowners, who will now need a deposit worth at least 25 per cent of their property's value to qualify for Abbey's cheapest deals.

The bank has also reduced the number of different types of mortgage deals significantly, and now has only one tracker rate left on the market.

Brokers said that the changes were a sign that rate rises were likely to continue, despite expectation's that the Government's £50 billion asset-swap facility will be available from next Monday.

Melanie Bien, director of Savills Private Finance, the broker, said: "Even if this is only a temporary move [by Abbey], fewer products on the market makes it difficult for landlords coming up to remortgage or looking for a new deal, and puts further pressure on those lenders who are still in the market. In the short term at least, rates may well continue to edge higher."

Another lender, Bristol & West, also increased the cost of deals for landlords today by up to 0.4 percentage points today, from 6.19 per cent to 6.49 per cent.

The moves come days after Woolwich also withdrew some of its buy to let deals from the market and GMAC-RFC, a specialist buy-to-let lender, shed 280 jobs in response to the shrinking market for loans.

All lenders have been steadily increasing rates and introducing stricter criteria for landlords since the credit crunch, but specialist buy-to-let lenders are typically more exposed to the money markets than traditional residential banks and building societies.

Withdrawals from the market and higher rates have meant that some landlords are being forced to pay their lender's expensive Standard Variable Rate because they are no longer eligible for good deals.

Jonathan Moore, of Mortgages for Business, said: “Most buy-to-let fixed rates, irrespective of the term length remaining, are priced at above 6 per cent, which is significantly higher than the rates available to investors two years ago that were often below 5 per cent.

"We have enjoyed a period of significantly cheap money and there now appears to have been a correction in pricing that investors must learn to appreciate."

Mr Moore added: "With fewer lenders operating, those with the best products are increasingly being flooded with applications and are often having to withdraw products within a few days of their introduction."

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