Bradford and Bingley (B&B), Britain’s largest buy-to-let mortgage lender, announced that it plans to scale back its mortgage lending but has told PIN that buy-to-let loans remain a core part of its business.

B&B has recently released its interim results which showed that the bank suffered a pre-tax loss of £26.7m for H1 2008. It has been a difficult period for the bank and the announcement of the loss followed a recent £400m rights issue which the bank said is now complete. The first half of the year has seen lenders struggle with both increased funding costs and a rise in the number of borrowers in arrears.

In B&B’s outlook for 2008, it is expected to implement a planned reduction in its mortgage balance but to continue building on its strong framework in the buy-to-let market. It also said that the board remained cautious with regard to the current economic climate and that it expected arrears to continue to rise.

A spokesman for B&B told PIN: “Prime low loan-to-value (LTV) buy-to-let lending with good rental cover is good banking business. That is B&B’s core competence, therefore retaining it has value.”