The buy-to-let arm of Bradford & Bingley has now closed for new business whilst the government takeover is being sorted out.
The bank has confirmed that all mortgage offers currently issued will be honoured, but no new mortgage applications will be accepted.
The government will be taking on a £41 billion mortgage book from the lender, and the savings and branch network has been sold to Spanish bank Santander, the banking group that owns the Abbey.
One of the reasons that B&B appears to have got into this trouble is that 75 per cent of its mortgage book is from buy-to-let or self-cert mortgages, where an applicant does not have to provide proof of income.
Experts are split over the effect this will have on landlords, whether it will increase interest rates or not. Some believe that the reduced level of competition will cause interest rates to rise, whilst others, such as Ray Boulger of John Charcol, the mortgage brokers, say that the bank has priced itself out of the market for some time now and so those who needed to look for cheaper alternatives elsewhere will already have done so.
