Buy-to-let mortgage market improvements spurs growing confidence amongst investors
The latest analysis by award winning mortgage adviser, Alexander Hall, suggests that whilst some evidence may point to more landlords leaving the sector, there has been a significant increase in the number of new buy-to-let loans being secured in recent months, driven by the ever-improving rates on offer to investors.
The analysis of the latest industry data* shows that there were some 52,648 buy-to-let loans issued during the final three months of 2024, marking a 7.7% increase on the previous quarter and the highest total seen since the start of 2023.
What’s more, the value of new buy-to-let lending also hit a two year high of £9.6bn during Q4 of last year.
Whilst this increase in new loan activity was largely driven by existing investors looking to remortgage, accounting for 62.4% of all new loans issued, 34.7% came via new rental property purchases, up from 33% the previous year.
This buy-to-let market positivity is expected to continue into 2025, with Alexander Hall forecasting that, on a quarterly basis, the number of new buy-to-let loans issued remain above the robust 50,000 threshold.
Whilst this may mark a very marginal quarterly decline, the firm also forecasts that the value of these new loans will continue to climb to £9.7bn quarterly.
This consistently strong market activity and the appetite from investors to borrow more has no doubt been driven by the improvements to the mortgage landscape in recent months.
In fact, additional analysis by Alexander Hall* shows that the average rate for a buy-to-let mortgage has reduced significantly over the course of the last year.
During Q4 2024, the average rate sat at 4.28%, down from 4.40% the previous quarter and from 5.59% versus the year before (Q4 2023).
Stephanie Daley, director of partnerships at mortgage advisor, Alexander Hall, commented: “Recent data from TwentyEA suggests that there’s a growing number of landlords choosing to exit the sector, or at least streamline their portfolios ahead of the Renters’ Rights Bill coming into play this year.
Whilst this may be the case to an extent, we’ve also seen an increasingly positive picture emerge with respect to those maintaining and growing their portfolios.
The number of buy-to-let loans issued and the value of these loans has increased substantially over the course of last year, with continued growth forecast for 2025, and we’ve also seen a 14% increase in the number of rental listings reaching the market.
This increase in buy-to-let investor activity is being largely driven by those looking to remortgage, but we’ve also seen an increase in new investment and it’s clear that the improvements to buy-to-let mortgage rates are helping to drive confidence across the sector.”
Data Tables and Sources
- *Data on BTL new loans issued and total value of new lending sourced from UK Finance.
- *Average annual BTL mortgage rate and change sourced from the Bank of England
- You can view the full data tables and sources online here.