BTL lending data shows landlords still investing

Landlords have borrowed £6.6bn in clear sign they have not been put off by looming Renters' Rights Act.

Buy-to-let mortgage borrowing continues to grow, with fresh lending figures indicating landlords are still investing in rental property despite regulatory change and headlines around landlord exits, according to Alexander Hall’s Managing Director Richard Merrett (pictured).

The brokerage firm’s latest market analysis, which is based on historic Bank of England data, shows buy-to-let lending has grown at an average quarterly rate of 7% over the last year.

Towards the end of last year (Q3), £6.6bn was lent to the buy-to-let sector. While buy-to-let mortgages remain the smallest segment of the mortgage market, accounting for 8.2% of total lending, the total represented a 22% increase on the previous quarter and a 26% increase compared with Q3 2024.

UK Finance figures from the same period show the value of new buy-to-let lending has risen by 28% year-on-year, while the number of new buy-to-let loans issued increased by 23%.

Only remortgaging activity recorded stronger growth, with an average quarterly increase of 12%, as a result of heightened refinancing activity as borrowers respond to improving rates and affordability.

The idea of a widespread landlord exodus simply isn’t reflected in the lending data.”

Merrett says: “While some amateur landlords may have chosen to exit the sector following a string of Government regulatory changes designed to dent portfolio profitability, the idea of a widespread landlord exodus simply isn’t reflected in the lending data.”

“In fact, our analysis shows that buy-to-let lending has been growing at the same pace as both first-time buyer and home mover activity over the last year, which underlines that investor appetites remain very much alive.

“Of course, there have been some notable improvements to the mortgage landscape which will have helped to fuel the fire, with lower rates, greater product availability, and more favourable monthly repayments all helping to support landlord margins and reinforce buy-to-let’s position as one of the more stable long-term investment options available.”