Good News from the Buy-to-Let Mortgage Market

A rise in the number of landlords taking out buy-to-let mortgages shows that the market fundamentals in the lettings sector remain strong.

As Chief Commercial Officer of buy-to-let lender Fleet Mortgages, Steve Cox is a numbers man.

And after crunching the data released so far this year, he’s given his verdict on the outlook for the buy-to-let (BTL) sector, and it’s pretty positive.

In an analysis piece in Mortgage Solutions magazine, Cox said BTL had outperformed expectations last year and got off to a positive start in 2025.

“I think we sometimes underestimate the resilience of our market,” he said.

Cox highlighted new BTL figures revealing a 6.5% hike in the number of loans and an 8.9% rise in value in the third quarter of last year.*

Meanwhile, overall BTL lending in 2024 came in at £33.2bn - significantly higher than the £27bn experts had forecast.**

“We’re seeing no slowdown in the number of existing borrowers who want to keep on purchasing,” Cox said.

“Plus, we’ve also seen a slight rise in first-time landlords, perhaps revealing that property remains a go-to asset class for many.”

So, what’s driving new and experienced landlords to invest in property?

Cox identified several factors:

Yields

Rental yields remain strong. The average UK private rent increased by 9% in the year ending December 2024.***

Demand

While the government has said it wants to turbo-boost housebuilding, it will take years to address the shortfall in homes.

“There are some market fundamentals that are simply unshakeable, including supply-side shortages,” Cox said.

Affordability

Despite the recent drop in interest rates, first-time buyers are still finding it tough to save for a deposit in the cost-of-living crisis.

Changes in the sector

Cox said there’s no doubt that the BTL sector has become more professional in recent years in the face of regulatory changes.

He also noted that the BTL mortgage market itself was becoming more complex to navigate with a wider range of products on offer.

His advice to those looking to remortgage or take a loan out for the first time was to work with a skilled adviser.

If you want to expand your rental portfolio or dip your toe in the BTL market for the first time, contact us today to discuss the local lettings market.

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* UK Finance

** Intermediary Mortgage Lenders Association

*** Office for National Statistics