"The number of buy-to-let loans issued and their overall value grew substantially throughout 2024, with further growth forecast for 2025. Additionally, rental listings have increased by 14%, highlighting ongoing activity in the sector"
- Stephanie Daley - Alexander Hall
Recent analysis by Alexander Hall reveals that despite signs of some landlords exiting the market, there has been a notable surge in new buy-to-let loan activity, spurred by increasingly competitive mortgage rates for investors.
Industry data shows that 52,648 buy-to-let loans were issued in the final quarter of 2024, representing a 7.7% increase compared to the previous quarter and the highest level recorded since early 2023. In addition, the value of new buy-to-let lending reached a two-year high of £9.6 billion during the same period.
While the majority of this lending was driven by existing landlords remortgaging — accounting for 62.4% of new loans — 34.7% related to new rental property purchases, up from 33% the previous year.
Looking ahead, Alexander Hall forecasts that buy-to-let lending will remain strong in 2025, with the number of new loans expected to consistently exceed 50,000 each quarter. Although a slight quarterly dip in volumes is anticipated, the value of new lending is projected to rise further to £9.7 billion per quarter.
This resilience in the market and growing investor appetite are largely attributed to recent improvements in mortgage products. Additional analysis from Alexander Hall shows that the average buy-to-let mortgage rate dropped to 4.28% in Q4 2024, down from 4.40% the previous quarter and significantly lower than the 5.59% recorded in Q4 2023.
“While data from TwentyEA indicates some landlords are choosing to exit or streamline their portfolios ahead of the Renters’ Rights Bill, we’re also seeing a very positive trend among investors who are maintaining or expanding their holdings," comments Stephanie Daley, Director of Partnerships at Alexander Hall.
"The number of buy-to-let loans issued and their overall value grew substantially throughout 2024, with further growth forecast for 2025. Additionally, rental listings have increased by 14%, highlighting ongoing activity in the sector.
"Much of this growth is being driven by remortgaging activity, but new investments are also on the rise. The improving mortgage landscape is clearly boosting investor confidence and encouraging renewed engagement in the market.”
