Buy-to-let (BTL) lending has fallen by more than half throughout 2023, with the number of new mortgage loans falling to 12,422 in Q1 2024.
Recent data from UK Finance has revealed that in Q4 2022, a total of 25,280 new mortgage loans were granted, more than double the first quarter of 2024.
Additionally, the number of outstanding BTL mortgages shrank for the first time on record, falling from 2.039 million in Q1 2023 to 1.98 million in Q1 2024.
UK Finance says that rapidly rising interest rates played a “major role” in the reduced number of new mortgage loans, as lenders’ affordability tests have become more challenging to pass when purchasing a BTL property.
The progressive removal of higher-rate income tax relief on mortgage payments for rental properties has also made being a landlord “more challenging” and “less attractive”. James Tatch, Head of Analytics at UK Finance, said: “A flexible and well-run private rental sector is an essential part of the housing market. Landlords face many challenges, from changing regulations to rising interest rates, but have shown resilience.”
SOURCE: UK Finance/Moneyfacts