If you’re in need of a buy-to-let mortgage, this guide looks at how you can find the best one for your circumstances.Read more…
How many Brits are buying homes to let them out?
If you’re looking to invest in property with the view of renting it out, a buy-to-let mortgage is a great way of borrowing the necessary funds to do so. We looked at the latest reports to see how many Brits are investing in property using this lending method.
- In the last 12 months, 234,000 buy-to-let mortgage loans were taken out (June 2019)
- Of these loans, 169,000 were remortgages and 65,000 were used for house purchases
- Over £36 billion was borrowed on buy-to-let mortgages in the last 12 months
- Of this £36 billion, £8.7 billion was used for house purchases and £27.3 billion for remortgages
- Up to 4.5 million Brits could be living in buy-to-let properties in the UK
How many buy-to-let mortgages are there?
In the last 12 months over 234,000 buy-to-let mortgages were taken out in the UK. Of those 234,000 mortgages, 169,000 were remortgages and 65,000 house purchases. Explore the graph and table below to see how these have trended over the last 12 months. October saw the most new mortgages at just under 22,000 while December saw the fewest, with under 17,500 – almost 5,000 fewer than October.
|Month||House purchase (£)||Remortgage (£)||Total (£)|
Value of buy-to-let lending
In total there was over £36 billion worth of buy-to-let mortgage lending in the last 12 months, which consisted of £8.7 billion in house purchases and £27.3 billion in remortgages. Explore the graph below to see how the value of buy-to-let mortgages has trended over the last 12 months. October 2018 saw the highest value of £3.3 billion in buy-to-let mortgage lending, which coincides with an increased number of mortgages taken out in this month (see above).
Who lives in buy-to-lets?
If you’re renting your property privately there is a chance you’re living in a buy-to-let property – so just how many Brits could be living in one? The latest figures from the Labour Force Survey show that 19% of Brits are living in private rented property, equal to 4 million people. Meanwhile, 64% of Brits are owner-occupiers (14.8 million) while the remaining 17% of Brits live in social rented properties (4 million).
|Type of residency||Percentage|
How do buy-to-let mortgages differ?
A buy-to-let mortgage allows you to purchase a house with the intention of renting it out. For this reason, a buy-to-let mortgage differs slightly from a normal mortgage where your own personal circumstances along with the rental potential will be taken into account by the lender.
What is a buy-to-sell mortgage and how is it different?
Buy-to-sell mortgages are a short-term finance arrangement for buying property with the intention of selling it. They differ to buy-to-let mortgages in that you have no intention of renting it out.
When buying a home you’re subject to stamp duty rates depending on the properties price. When purchasing a second home or a buy-to-let property you’re subject to an increased rate of stamp duty by 3%.
- Stamp duty: Since April 2016, there is an additional 3% stamp duty on buy-to-let property purchases. This means the
following rates apply:
|Portion of property price||Percentage to pay|
|£0 - 125,000||3%|
|£125,001 - £250,000||5%|
|£250,001 - £950,000||8%|
|£950,001 - £1,500,000||13%|
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