125% and 100% mortgages have been dropped because they represent more of a risk to the lenders. In todays present climate the appetite for risk has decreased and lenders are trying to minimise their exposure at the moment and so are adopting more stringent borrowing criteria. If a property decreases in value in a downturn and the owner defaults on mortgages payments the bank has more chance of recovering their total outlay if they have only lent 80% instead of 100% of the value
Regarding the buy to let ppl i think it's somewhat of a misnomer hyped up by the media. They can't possibly be buying up all the property. At the moment 10% of households live in rented accommodation. If this translates then 90% of property is bought is by private buyers. 10% rented seems quite low to me and the owner occupier levels seem high. In any event the option of rented accommodation is good for the economy and so helps to keep ppl in employment in the long term.
I think it’s a valid point that more and more ppl are finding it difficult to get on the housing market, but unfortunately there is so much money about these days that the market doesn’t care if everybody can afford to buy, only that there are enough who can.