Buy-to-let loans on the up

Rental properties set to increase, as bank offers tenant insurance

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The number of buy-to-let loans being handed out jumped by two-fifths in the final quarter of 2024 compared with a year earlier, according to UK Finance figures.

Across the UK, 52,648 new buy-to-let loans were advanced, worth £9.6 billion.

This was an increase of around two-fifths or 39.2% in terms of the volume of loans and a 47.2% rise in terms of the value of loans compared with the same quarter in the previous year.

Interest rates on new buy-to-let loans were slightly less expensive typically than a year earlier.

The average interest rate across all new buy-to-let loans in the UK was 5.09% in the fourth quarter of 2024, which was 0.61 points lower than in the same quarter of 2023.

Richard Donnell, executive director at Zoopla, said tax changes in previous years had "shifted the business model" for landlords, with smaller landlords "who didn't see buy-to-let as a business" selling up and bigger landlords consolidating their portfolios.

He continued: "House prices have underperformed in recent years, but higher rents have helped cover rising costs and pushed yields higher."