Shifts in Buy-to-Let Market Prompt Landlords to Consider Selling Up

Recent research by uSwitch indicates a notable transformation in the UK's buy-to-let market, with almost one-third of landlords contemplating selling their properties within the next year. Additionally, the average loan value for buy-to-let purchases surged to nearly £158,500 in March 2024, marking a 6% increase from the previous month. Individuals aged 40-49 emerged as prominent borrowers for remortgaging buy-to-let properties, securing slightly larger loans compared to their older counterparts aged 50-59.

Claire Flynn from uSwitch highlights the significance of the private rental sector (PRS), which currently constitutes approximately 20% of the UK's total housing tenure, accommodating roughly 4.6 million households. To meet the projected demand for 1.8 million new households by 2032, it's estimated that PRS supply must increase by 227,000 homes annually over the next decade. Despite buy-to-let mortgage approvals dropping to around 83,400 in 2023 from over 187,000 in 2022, predictions suggest a potential rise to nearly 168,000 approvals this year, followed by a gradual decline until 2032.

The study underscores London's status as the region with the highest average buy-to-let loan value, reaching £272,052 for new investment property purchases, significantly surpassing other UK regions. In 2023, lenders approved over 83,000 buy-to-let mortgages, comprising 7.5% of all mortgage lending that year. However, the total value of buy-to-let mortgages experienced a substantial 57% drop compared to the same period in 2022, reaching £4.7 billion, despite a 10% increase from the previous quarter. Lloyds emerges as a dominant player in the UK mortgage market, holding nearly 17% of the industry share.

Source: Property118