![Lloyds](http://i.imgur.com/6dW33w3.png)
Britain's largest buy-to-let lender, a division of Lloyds, has become the first to restrict landlords' loans based on their likely tax bills - meaning higher-earning buy-to-let investors will come under pressure to raise rents.
Birmingham Midshires currently requires all borrowers to charge rents equal to at least 125pc of their monthly mortgage costs.
But it has said that higher-earning borrowers, who pay tax at the 40pc and 45pc levels, will be subject to tougher requirements.
Tax changes announced by George Osborne and being introduced next year will begin to remove landlords' ability to deduct their mortgage costs from their rental income before paying tax. Instead they will receive a 20pc tax credit.
This means that higher and additional-rate taxpayers will be affected more seriously by the change. Some could even find they make a loss of every month - on which tax is still required to be paid.
Previously 125pc had been the standard amount for lenders to require, but since the start of this year many banks have been increasing the required amount because of concerns over borrowers' ability to afford loans as the new taxes start to apply.
Some, such as Nationwide, have moved to require income of 145pc of the landlord's mortgage costs.
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