In Q3 2024 there were 48,862 new buy-to-let loans advanced in the UK, worth £8.6bn, the latest data from UK Finance has revealed.
This was up 6.5% by number (8.9% by value) compared with the same quarter in the previous year.
The average gross buy-to-let rental yield in Q3 2024 was 6.93%, compared with 6.53% in the same quarter in 2023.
During this period, the average interest rate across all new buy-to-let loans was 5.22%.
This was 0.03% higher than in the previous quarter, but 0.09% lower than in the same quarter of 2023.
Reflecting the movements in interest rates, the average buy-to-let interest cover ratio (ICR) for the UK in Q3 2024 was 195%, up from 190% in Q1 2024.
In addition, the number of buy-to-let fixed rate mortgages outstanding in Q3 2024 was 1.4 million, 3.3% up on a year previously.
In contrast, the number of variable rate loans outstanding fell by 14.9% to 541,488.
At the end of Q3 2024 there were 13,000 buy-to-let mortgages in arrears greater than 2.5% of the outstanding balance.
This was down 570 from the previous quarter but 19% higher than in the same quarter last year.
Lastly, there were 710 buy-to-let mortgage possessions taken in Q3 2024.
This is unchanged from the previous quarter, but an increase of 73.2% on the same quarter in 2023.
Richard Pike, chief of sales and marketing at Phoebus Software, said: “While Q3 figures aren’t as strong as Q2, which saw a surge of 26% in buy-to-let business compared to Q3’s 6.5% rise, this still shows a strong, confident buy-to-let market.”
“In December, UK Finance’s annual buy-to-let report predicted a 7% drop in mortgage lending for buy-to-let purchases in 2025 compared to 2024, which was mainly due to the latest in a string of tax and regulatory blows dealt to landlords over recent years – this time on Stamp Duty in the Autumn Budget.
“However, if all goes according to market predictions, interest rates and mortgage rates should drop in 2025, which should encourage many landlords – particularly professional portfolio landlords – to maintain hold of their properties.
“Despite recent challenges, the buy-to-let market is still a high yield investment.”
Melanie Spencer, sales and growth lead at Target, said: “Given the challenges surrounding the buy-to-let market, it’s encouraging to see a year-on-year increase in lending in Q3.
“Of course, the data captures the market prior to the Budget and the changes to Stamp Duty on additional properties.
“However, the market has been resilient and landlords have remained agile, capitalising on a challenging residential market and exploring opportunities further afield to expand their portfolios.
“There will always be those that will choose to sit back and not expand due to market conditions or policy changes, but conversely there are those still making the most of the opportunities in the market.
“After all, demand for good rentals remains high as does rents and the yields available to landlords.”
She continued: “Buy-to-let lenders have continued to innovate too and make movements on rates where possible to help support those landlords either looking to expand or refinance.
“Timing has always been a critical part of the buy-to-let process, especially now as the demands on landlords increase.
“To best support brokers and their landlord clients, lenders need to be investing in the latest technology to drive efficiencies in application, decision-making and throughout the entire process to help facilitate transactions.”
