Buy-to-let mortgage numbers soared by nearly 40% at the end of 2024, raising hopes of revival for this sector of housing market.
There were 52,648 new buy-to-let loans advances in Quarter 4 (Q4) of 2024 compared to the previous three months. This was a rise of 39.2% in the number of loans and 47.2% in terms of the value, according to the new data from UK Finance.
Meanwhile, the data showed the average rental yield was 7% – higher than the 6.74% in the same quarter in 2023. And the average interest rate across all new buy-to-let loans was lower, coming in at 5.09% in Q4 2024, which was 0.13 basis points lower than in the previous quarter, and 0.61 basis points lower than in the same quarter of 2023.
Russell Anderson, commercial director of mortgages at Paragon Bank, a buy-to-let lender, said the figures showed a ‘resurgent’ buy-to-let market throughout 2024, with strong growth in both purchase and remortgage activity,
“The data supports our view that landlords are astutely managing their lettings businesses,” he added, “borrowing to invest in higher yielding properties or refinancing to proactively manage debt across portfolios and improve privately rented housing stock.”
It was not all good news, the data showed there were 700 buy-to-let mortgage possessions taken in Q4 2024. Whilst this was unchanged from the previous quarter, it was an increase of 29.6% on the same quarter a year previously.
When it came to arrears, however, in Q4 2024 there were 12,610 buy-to-let mortgages in arrears by more than 2.5% of the outstanding balance. This was down 390 from the previous quarter and 7% than in the same quarter a year previously.
Harry Goodliffe, director at HTG Mortgages speaking via the Newspage agency, said: “The increase in possessions is a stark reminder that some landlords are facing tough times. With the market constantly shifting, it’s crucial for landlords to adapt and stay ahead of the curve in order to protect their investments.”
However, he also said the 40% rise in new buy-to-let loans was ‘great to see’. “It shows that confidence in the market is still strong,” he said, “despite the challenging economic climate.
“The fact that rental yields are holding steady is also encouraging, giving landlords a reason to be optimistic.”
