Average buy-to-let rates for some two-year fixed mortgages have doubled since the start of the year, said Property Master.

The buy-to-let broker said that the average rate for a typical £160,000 buy-to-let mortgage fixed for two years for landlords with at least a 40% deposit had more than doubled from 1.69% in January to 3.43% in August. This took the monthly cost including fees from £262 to £494, an increase of £232.

The Property Master Buy-to-let Mortgage Tracker follows 30 lenders who account for 75 per cent of total buy-to-let mortgage lending. It reports its findings every month.

It also found that five year fixed rates up to 60% of the property’s value had increased dramatically from 1.94% in January to 3.5% in August – an increase in monthly cost, including fees, from £273 in January to £481 in August, up £208.

Angus Stewart, chief executive of Property Master, said: “The cost of buy-to-let mortgages continues to rise inexorably. Obviously much of this reflects the Bank of England’s decision to hike interest rates for the sixth time earlier this month but there are other factors at play too.

“We are seeing reduced competition in the buy-to-let mortgage market caused by a combination of factors with some lenders using higher rates to manage customer demand whilst others are taking the opportunity to widen their margins.

“For many of the smaller players in this market unaffordable rises in mortgage costs will undoubtedly lead them to conclude buy-to-let no longer works for them. Indeed, the latest figures from HMRC show a dramatic increase in takings from Capital Gains Tax suggesting many landlords are deciding this is the moment to sell-up.”