UK Finance published its report on Buy-to-Let lending, finding that in Q2 2024, there were 51,459 new buy-to-let (BTL) loans advanced in the UK, totalling £8.9bn.
This marked a 26% increase in the number of loans and a 27.7% rise in value compared to the same quarter in 2023.
The average gross BTL rental yield for the UK was 6.9%, up from 6.51% a year earlier.
The average interest rate on new buy-to-let loans was 5.19% in Q2 2024, down 0.21% from the previous quarter but 0.04% higher than the same period last year.
The average interest cover ratio for buy-to-let loans stood at 196%, an increase from 190% in Q1 2024 and unchanged compared to a year prior.
The number of fixed-rate BTL mortgages outstanding increased by 2.0% year-on-year to 1.4 million, while variable rate loans fell by 14.8% to 565,815.
By the end of Q2 2024, 13,570 buy-to-let mortgages were in arrears of more than 2.5%, a rise of 51% compared to the same quarter in 2023.
There were 710 possessions on buy-to-let mortgages taken during Q2 2024, up 33.8% over the same period last year.
Russell Anderson, commercial director at Paragon Bank, said: “UK Finance’s buy-to-let update is positive and acts as evidence of the market continuing to normalise following the challenging economic and political conditions experienced last year.
“The figures reveal strong growth in total gross lending, in both the value and number of loans written, since the previous quarter and when compared to the same period in 2023.
“Drilling down into the data, we see that the maturities continue to be a key driver of business, with remortgaging during the quarter valuing £6.2 billion, the highest since the end of 2022.
“Encouragingly, we also see that landlords are actively growing their portfolios, with the value of purchases increasing consecutively during the last three quarters to £2.4 billion.
“If we compare this number with the £2.7 billion of buy-to-let mortgages written for purchases in the second quarter of 2019, we see that today’s market has almost recovered to pre-pandemic levels.”
