Paragon, the UK's third-biggest buy-to-let mortgage lender, says it is impossible to borrow all the money it needs to sustain its business and plans to reduce the number of buy-to-let mortgages it offers by half next year, This Is Money reported.

It follows an announcement by Bradford & Bingley - Britain's biggest buy-to-let lender - that it has taken measures to raise cash.

The credit crunch means many banks have withdrawn deals for home loans and are turning down up to 50% of loan and credit card applications.

Paragon is seen as particularly vulnerable because it does not have any savings customers, like the banks do.