Octane Capital has revealed that the average landlord has seen the debt they owe via BTL mortgage loans increase by 19% in the last year.
The data shows that — across the nation — the amount of money owed has increased from £467,548 per landlord in Q1 2022 up to £558,423 in Q1 2023.
This drastic increase has been blamed on a greater reliance on borrowing, as the average number of BTL loans held per landlord has also increased by 12% — up from an average of 6 in Q1 2022 to 6.7 in Q1 2023.
The West Midlands has seen the largest increase in the number of loans held — rising by 49% in the past year — leading to a 33% increase in the amount of money owed via BTL loans.
The Southeast (+49%) and East of England (+29%) follow the West Midlands with a sharp increase in the number of BTL loans owed, as well as a drastic rise in the total amount of outstanding debt via these loans, at 95% and 90% respectively.
The Northeast (+3%), Yorkshire and the Humber (+2%) and the East Midlands (+2%) have seen a more marginal increase in the total amount owed.
Jonathan Samuels, CEO at Octane Capital (pictured above), commented: “The high cost of borrowing is clearly having a significant impact on BTL landlords.
“While it’s clear that a lot of landlords are willing to saddle more debt in order to keep their operation moving, it’s inevitable that a significant number will either downscale their ambitions or jump ship entirely.
“For those who are willing to stick it out and reap the benefits in the long run, there is a real opportunity being presented by the properties either offloaded or overlooked by others.
“While now might not seem like the best time to increase the size of your portfolio, being bold when others are meek can bring reap rewards in the long-term — especially now that mortgage rates have shown signs of easing.”
