The Bank of England’s request for extra powers to control lending to buy-to-let borrowers could mean that some landlords will have to find a 40% deposit.

The prediction has come from Countrywide Residential Lettings.

The powers sought by the Bank’s Financial Policy Committee will allow it to ask lenders to stress test how much landlords can borrow and ensure that the income landlords receive is greater than the interest payments on their mortgages.

Most lenders already insist that rent covers mortgage repayments by 135% – but interest rates are currently historically low.

What would happen if they rose?

Stress tested against an interest rate of 7%, in similar fashion to owner-occupiers under the Mortgage Market Review, Countrywide said a third of new mortgaged investors would have to increase the amount of equity they put down, amounting on average to an additional £40,000.

Nick Dunning, group commercial director of Countrywide, said: “Stress testing of new loans for investors has the potential to increase the entry barriers for would-be landlords.

“It will primarily affect areas in the south of the country and areas where yields are lower.

“If the proposals are implemented, would-be landlords will have to put down increasingly larger deposits to meet more stringent lending criteria.

“The high value nature of parts of London and the south-east mean many landlords will find themselves having to put down deposits upwards of 40%.

“While lenders need to ensure repayments are affordable to the borrower, they must ensure they strike a balance between affordability and viability.”

According to Countrywide, rents have continued to increase steadily throughout the year to stand at an average of £916 per month in September.

This represents annual growth of 5.2%, with rents in London up by 9.8%.