Average UK private rents increased by 8.6% in the 12 months to July 2024, according to provisional estimates from the Office for National Statistics. They increased to an average cost of 1,319 (8.6%) in England, £748 (7.9%) in Wales, and £965 (8.2%) in Scotland.

“The amount of rental income that is currently required to get a new mortgage through is absolutely ridiculous,” he told Mortgage Introducer. “The buy-to-let industry needs to look at other ways of means testing and stress testing in order to have a more favourable outcome for a landlord

“I had a client charging £550 a month on their rent. To put them to another lender, on a more favourable rate with less fees, they had to increase their rental income to £750 a month. The client has said, ‘I’ve got great tenants in this property, they look after it, they’ve always paid rent on time. We don’t want to increase the rental income.’ So, if you don’t want to increase your rental income, you can’t go to another lender, which in effect is creating what I would consider a mortgage prisoner.”

Are landlords leaving the private rental sector?

There has been much speculation in the mortgage industry about landlords selling their properties and leaving the market, due to more restrictive legislation.

“What you’ve tended to see for the last 10 years, are every man and his dog being able to get an accessible buy-to-let mortgage and rather than use it as an investment, they’re using it as an income source,” Staton said. “You should only be entering the buy-to-let mortgage market now if you are a serious landlord looking for a long-term investment, potentially a pension pot, and not somebody who is looking to subsidise their champagne lifestyle on a lemonade budget, at the moment.”