UK BTL market activity was stable in the second quarter with £8.8bn of new loans advanced in that period, down only 0.2% by value.
This amount was lent over 49,590 new BTL loans or 2.6% fewer from the previous quarter.
The average BTL rental yield during the second quarter was 7.26%, up from the 6.9% recorded in the same quarter in 2024. Conversely, the average BTL interest rate has decreased between these periods by 19bps to 5%.
These results have been taken positively by some in the industry, with many fearing the oncoming Renters Rights Bill.
"Despite reports of an exodus of landlords amid concerns about the imminent Renters’ Reform Bill, the BTL market does not appear to be faring too badly, as mortgage rates continue to fall and rents increase,” said Mark Harris, CEO at SPF Private Clients.
"The lending environment is certainly encouraging, with lenders having plenty of money to lend and are keen to do so.”
Others have identified different takeaways. This data reflects a continued retreat of amateur or accidental landlords, according to Heather Hancock, head of credit & operations at Black & White Bridging.
“A drop in the value of new BTL lending and the number of BTL loans, highlights that we are seeing landlords exiting the market… leaving the industry with a more professional cohort,” said Heather.
“These landlords are more likely to look to refurbishment or conversion projects to broaden their portfolios, which is driving demand for specialist finance ahead of BTL loans.
“We aren’t saying there aren’t good yields to be had, but to make waves in the current climate landlords need to take advantage of lending options, like bridging, that they wouldn’t have needed previously.”
