Landlords across the UK are regaining confidence as new analysis shows a notable uplift in buy-to-let mortgage activity, fuelled by improving rates and robust rental demand. The latest figures from award-winning mortgage adviser Alexander Hall reveal a vibrant market that promises opportunities for both seasoned and new investors.
According to the data, the final three months of 2024 saw the highest number of new buy-to-let loans secured since early 2023, setting a positive tone for the sector as it moves into 2025.
New lending hits highest levels in two years
Alexander Hall’s analysis shows that 52,648 new buy-to-let loans were issued in Q4 2024, a 7.7% rise compared to the previous quarter. This brings the total lending value to an impressive £9.6 billion – the highest figure recorded in two years.
Interestingly, while 62.4% of this lending came from landlords seeking to remortgage existing properties, a healthy 34.7% related to new purchases, up from 33% a year earlier. These figures suggest that despite headlines of some landlords selling up, investor appetite for building and maintaining portfolios remains remarkably strong.
Stephanie Daley, Director of Partnerships at Alexander Hall, said: “Whilst this may be the case to an extent, we’ve also seen an increasingly positive picture emerge with respect to those maintaining and growing their portfolios.”
Mortgage rates drive renewed investment interest
A major driver behind the buoyancy in the buy-to-let sector has been the significant drop in average mortgage rates. Alexander Hall’s figures show that during Q4 2024, the average rate for a buy-to-let mortgage fell to 4.28%. This represents a notable improvement from 4.40% the previous quarter, and a huge shift from 5.59% at the same time the previous year.
Daley continued: “The number of buy-to-let loans issued and the value of these loans has increased substantially over the course of last year, with continued growth forecast for 2025. We’ve also seen a 14% increase in the number of rental listings reaching the market.”
She added: “This increase in buy-to-let investor activity is being largely driven by those looking to remortgage, but we’ve also seen an increase in new investment and it’s clear that the improvements to buy-to-let mortgage rates are helping to drive confidence across the sector.”
Outlook for landlords remains strong
Looking ahead, Alexander Hall forecasts that quarterly buy-to-let lending will remain above 50,000 loans into 2025, with the total value expected to edge up to £9.7 billion. This sustained momentum suggests that landlords who remain active and strategic will continue to benefit from a market rich in opportunity.
With the government pushing forward with the Renters’ Rights Bill, it’s crucial for landlords to stay agile and capitalise on the current mortgage environment. Reduced borrowing costs, paired with high tenant demand, could make 2025 a defining year for those looking to expand or strengthen their portfolios.
