Increasing rents and falling interest rates have attracted residential landlords back to the market, with the number of rental properties remaining stable at 5.5 million, new figures show.
In Q4 2024 there were 52,648 new buy-to-let loans advanced in the UK, worth £9.6bn. This was up 39.2% by number (47.2% by value) compared with the same quarter in the previous year.
“The increase reflects a slight improvement in the cost of mortgage debt and the knock-on ability for private landlords to make a profit with a moderate level of gearing,” Lucian Cook, head of residential research at the estate agency Savills, said.
The average gross buy-to-let rental yield for the UK in Q4 2024 was 7%, compared with 6.74% in the same quarter in the previous year.
The average interest rate across all new buy-to-let loans in the UK was 5.09 per cent in Q4 2024. This was 0.13 basis points lower than in the previous quarter, and 0.61 basis points lower than in the same quarter of 2023.
Reflecting the downwards movement in interest rates, the average buy-to-let interest cover ratio (ICR) for the UK in Q4 2024 was 201 per cent, up from 190 per cent in Q1 2024 and 21 basis points higher than a year previously.
The number of BTL fixed rate mortgages outstanding in Q4 2024 was 1.43 million, 4.4% up on a year previously. In contrast, the number of variable rate loans outstanding fell by 15.9% to 518,000.
At the end of Q4 2024 there were 12,610 buy-to-let mortgages in arrears greater than 2.5 per cent of the outstanding balance. This was down 390 from the previous quarter and 7% lower than in the same quarter a year previously.
There were 700 buy-to-let mortgage possessions taken in Q4 2024. This is unchanged from the previous quarter, but an increase of 29.6% on the same quarter a year previously.
Index points to another year of record-breaking rents
