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Graham Awards


Buy To Let loans fall over long term despite recent sector resurgence

Buy To Let may have had a resurgence in the past year but long-term lending patterns suggest landlords have been hit by government changes to tax and regulation.

An analysis by lending service Octane Capital shops that in 2021 the value of residential loans to individuals within the buy-to-let sector totalled £36.9 billion. 

Despite last year being considered a strong one for the private rental sector and landlords buying properties, this marks an eight per cent drop on the £40.1 billion lent in 2016, before a spate of fiscal measures were introduced against landlords. 



The most notable legislative changes included the restrictions of tax relief on mortgage finance costs, the abolition of the ‘wear and tear’ allowance, a three increase on the rate of stamp duty payable on buy-to-let homes and an accelerated payment schedule with regard to Capital Gains Tax.

Last year, the £36.9 billion loaned via the buy-to-let sector accounted for just 11.7 per cent of total lending. This marks a drop on 2016, when buy-to-let loans accounted for 16.1 per cent.

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    It would be interesting to know whether the treasury's income from landlords has increased or decreased over the last few years. Also the scale of consequences including the effect on the types of rental property and the average rents, and waiting lists for housing of different types. I'm guessing more properties have been shifted from family lets to HMO's or serviced accommodation but not sure there's been any proper research on this.

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    Not surprised that BTL lending is down as it's now far too risky to do on borrowed money.

    I started by borrowing £54k to buy a £60k flat let out for £600 per month.

    I have built this into a £4 million portfolio with £250k per annum gross rental but still have about £1 million in mortgages, principally to reduce the IHT payable on my demise. In any case the additional £1 million loans cost under £20k but generate an extra £60k rental income, so I would be daft to change this.

    However nowadays I wouldn't dare start out with a 90% loan, so around 50 joint tenants wouldn't have a home, thanks to the higher risks posed by tenant friendly do gooders


    Problem is with property prices as they are, anyone starting out now would soon run out of money without borrowing. Most BTL deals are 75% LTV so the investor takes all the risk and again, soon runs out of money, unless entering into the sort of "joint ventures" advertised by some landlord education.

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    The Public Accounts Committee has 6 more recommendations for the White Paper to give Tenants even more rights which is impossible as they have far too many rights already, they are so full of crap why are they in a job. Simple they are bringing in Corbyn / McDonnell Policy’s the difference is they told us they would take the Property off us. When Section 21 is gone you’re Property is gone, Right so if you buy a Terraced House in West London which I doubt you’ll ever have it paid for £500k. / half a million £’s, you are committing yourself to years of financial risk, plus loads of other costs, like Insurance, maintenance, possibly licensing and loads of Compliance’s that carries huge financial penalties, Then a guy comes along pays one month’s Rent, can stay forever and have more rights than the owner. A Tenant would need to be some fool to Buy a Property, It will be a big Collapse, it’s corruption at the highest level.


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