Lending to the buy-to-let property market took a hit in the first three months of this year, with the first fall in mortgage loans to the sector for five quarters blamed on the faltering UK economy.

The total number of buy-to-let mortgages now stands at just over 1.4m, worth some £160bn.

New buy-to-let lending in the first quarter of this year totaled £3.7bn, representing some 32,300 loans, according to the Council of Mortgage Lenders. The figure was 5pc lower than that for the fourth quarter of 2011.

The likely cause is that “investor demand has not proved immune to the renewed recession, tightening credit conditions and declining sentiment about the potential for further sharp gains in rents”, said analysts at Capital Economics.

Nonetheless, despite the fall, buy-to-let lending grew as a share of the overall mortgage market, with lenders still proving cautious.

Buy-to-let mortgages represented 12.8pc of the total value of outstanding mortgages at the end of the first quarter, up from 12.6pc at the end of 2011 and 12.2pc the same time a year earlier. The trend is expected to continue.

“The lettings market is the only area of the property market that is growing and this doesn’t look set to change in the immediate future,” said Tracy Kellett of buying agents BDI Home Finders. “There’s still a shortage of stock, and until this is rectified rents will remain high.”