The Buy-to-Let (BTL) market provides the lion share of the residential rental stock in the UK. There have been numerous recent headwinds affecting levels of new activity in this sector.
The latest being the further increase in the stamp duty surcharge from 3% to 5% (Autumn Budget 2024) but also higher mortgage costs and a raft of legislative changes.
Since the end of 2022 when mortgage rates increased significantly, BTL lending has slowed and has yet to recover to the trend rate.
As mortgage rates continue to come down (albeit gradually) and strong rental growth helps offset rising costs, there could be a revival in BTL lending activity.
This national picture also doesn’t tell the whole story, landlords have become more focused on regions with lower prices, resulting in higher yields and reduced acquisition costs. Source: Dataloft by PriceHubble, FCA Mortgage data