The data from the Council of Mortgage lenders shows that there were 37,000 new loans, worth £3.9 billion, down 12% down on the third quarter, and 56% down compared with the fourth quarter of 2007.
Previous quarterly data, which the CML began collecting in 2006, show this is almost certainly the lowest quarterly lending figure.
Over 2008 as a whole, buy-to-let lending accounted for 10.6% of the value of total gross mortgage advances, down from 12.3% in 2007.
Many buy-to-let borrowers will now be benefiting from significantly lower mortgage costs than when they first took out their loan. With tenant demand remaining strong in most areas, many landlords will therefore be experiencing an improvement in their net income, the CML says.
However, at the end of 2008, 2.32% of buy-to-let mortgages were over three months in arrears without a receiver of rent in place, while a further 0.23% were over three months in arrears with a receiver of rent in place.
Reasons for this include landlords diverting rental income received from tenants to servicing other commitments instead of paying their buy-to-let mortgage; and an over-supply of rental property in some locations mean that some landlords will not be receiving a rental income on empty properties in current market conditions, and may be unable to pay their mortgage as a result.
In terms of repossessions, 0.11% of buy-to-let mortgages were taken into possession in the fourth quarter of 2008, broadly in line with the wider market, although the CML points out it is difficult to compare the two markets on a like-for-like basis.
