UK buy-to-let statistics 2023

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.

Quick overview

£36.8 billion in buy-to-let mortgages was borrowed between April 2022 and March 2023.
The average buy-to-let mortgage rate in July 2023 was 6.18% for a 2-year fix, up by 4.32% in two years.
In 2022, around 4.61 million people were living in buy-to-let properties.
As of June 2023, the average yearly return on a buy-to-let property is £2,995, down from £7,312 in June 2022.
A buy-to-let property owner is predicted to earn over £4000 less a year if a 2-year buy-to-let loan was fixed in June 2023 compared to June 2022.
The value of buy-to-let lending dropped by 40% in one quarter between December 2022 and March 2023.
The share of mortgage lending for buy-to-let properties was just 9.8% in Q1 2023, the lowest share recorded since 2011.
In 2022, 1,450 buy-to-let properties were repossessed.

What is the buy-to-let market size in the UK?

From April 2022 to March 2023, there was an estimated £36.8 billion worth of buy-to-let mortgage lending, down slightly from £37.5 billion between April 2021 to March 2022.

In the first quarter of 2023, the value of buy-to-let mortgage lending dropped by 40% to £5.8 billion from £9.7 billion in the previous quarter. This is also a 44% drop from the same period in 2022 when lending was £10.3 billion.

The share of total mortgage lending value for buy-to-let purposes was just 9.8% in Jan-March 2023, the lowest observed since 2011, which may suggest declining interest in landlords wishing to purchase properties to rent.

On the other hand, the highest value of buy-to-let lending granted was in the third quarter of 2022 at £10.7 billion, accounting for 12.5% of the total mortgage lending value.

Graph
Table

Month	Value (£bill)
Q2 2021	10.1574
Q3 2021	8.7346
Q4 2021	8.2836
Q1 2022	10.3046
Q2 2022	10.608
Q3 2022	10.7375
Q4 2022	9.7104
Q1 2023	5.7624

What is the average buy-to-let mortgage rate?

The average buy-to-let mortgage rate in July 2023 was 6.18%, assuming a 2-year fixed-rate mortgage at 75% LTV (loan-to-value ratio). This is the highest rate in the last decade and has increased dramatically by 4.32% from an average interest rate of just 1.86% in July 2021.

The lowest average buy-to-let interest rate in the past decade was seen in October 2021 at just 1.65%.

Graph
Table

Month	Interest rate
Jul 2021	1.86
Aug 2021	1.79
Sep 2021	1.75
Oct 2021	1.65
Nov 2021	1.67
Dec 2021	1.7
Jan 2022	1.7
Feb 2022	1.78
Mar 2022	2.12
Apr 2022	2.43
May 2022	2.64
Jun 2022	2.85
Jul 2022	3.37
Aug 2022	3.52
Sep 2022	4.12
Oct 2022	5.87
Nov 2022	6
Dec 2022	5.68
Jan 2023	5.34
Feb 2023	5.11
Mar 2023	5.05
Apr 2023	4.69
May 2023	4.74
Jun 2023	5.45
Jul 2023	6.18

What is the average return on a buy-to-let property?

As of June 2023, the average yearly return on a buy-to-let property is £2,995, down from £7,312 in June 2022. This refers to the amount remaining once mortgage interest payments have been deducted from rental income.

This decrease is due to rising mortgage rates in recent months. When buy-to-let mortgage rates increase, anyone looking to take out a new loan will have much higher monthly interest payments. This puts pressure on rental prices, which are already rising. We compared how buy-to-let returns have changed over time in line with changing house prices, mortgage rates and rent prices.

In June 2023, landlords would have paid approximately £979 in buy-to-let mortgage interest. An average monthly rental price of £1,229 leaves them with returns of £250, adding up to £2,995 over the year.

This is a substantial decrease in returns from June 2022, when just £504 in interest was paid, and there was an average rental price of £1,113, giving returns of £609. This adds up to £7,312 over the year.

These estimates show the owner of the average buy-to-let property could earn £4,317 less a year if a 2-year loan was fixed in June 2023 compared to June 2022. This is why there are fears about landlords selling their buy-to-let properties and leaving the rental market.

Graph
Table

Period	Interest rate	Average monthly returns
May 2016	3.21%	£480.91
May 2017	2.62%	£540.86
May 2018	2.26%	£598.60
May 2019	2.28%	£607.59
May 2020	1.83%	£694.21
May 2021	2.00%	£680.12
May 2022	2.64%	£640.28
May 2023	4.74%	£366.14

How many buy-to-let properties are there in the UK?

In 2022, around 4.61 million people were living in buy-to-let properties. The total number of buy-to-let properties is likely higher, as some rental properties would have been unoccupied.

However, reports suggest more landlords are selling their rental properties, with estimates that 400,000 properties have been sold between 2016 and May 2023 and 126,500 properties have been sold since the beginning of 2022. The same estimates suggest that 1 in 10 rental properties could be lost from the market by the end of 2023.

Successive rises in the base rate have meant that mortgage rates are soaring in the buy-to-let market as well as the residential market, and this makes it less appealing for landlords to invest in property.

What is the average buy-to-let deposit?

A typical deposit for a buy-to-let property is usually 25% of the property price, but this can vary between 20% and 40%. The minimum deposit will usually be higher than a standard residential mortgage deposit.

Who is the biggest buy-to-let mortgage provider in the UK?

Nationwide is the biggest UK buy-to-let provider in terms of gross lending, with a market share of 15.8% and total lending of £7.43 billion in 2021. Lloyds Bank comes in second place, with a 14.3% market share, followed by Santander (9%), Coventry Building Society (7%) and OneSavings Bank (6%).

Graph
Table

Bank	Market share
Nationwide Building Society	15.80%
Lloyds Banking Group	14.30%
Santander UK	9.00%
Coventry Building Society	7.00%
OneSavings Bank Plc	6.10%
Barclays	5.00%
NatWest Group	4.60%
Virgin Money Plc	4.50%
Paragon Banking Group	3.60%
Foundation Home Loans	2.50%

What is the average buy-to-let rental yield?

Rental yield is the potential returns a landlord could get on a property they purchase and then rent out. The average rental yield varies across property types.

Multi-block flats had the best rental yield in the third quarter of 2022 at 6.3%. They are followed by houses in multiple occupations (HMOs) and bungalows. Houses and individual flats are estimated to be less profitable property types in the buy-to-let market, but there isn’t a massive difference between the property types.

Graph
Table

Property type	Q3 2022
Multi-block flats	6.30%
Houses in multiple occupation (HMO)	6.20%
Bungalow	6.10%
Detached house	5.90%
Terraced house	5.90%
Individual flats	5.80%
Semi-detached house	5.70%

Buy-to-let mortgages in arrears

There were 7,030 buy-to-let mortgages in arrears of 2.5% or more in the first quarter of 2023, 16% more than in the previous quarter. Within the total, there were 3,420 buy-to-let mortgages in the lightest arrears band, representing between 2.5% and 5% of the outstanding balance. This was 33.1% higher than the previous quarter.

The highest amount of arrears owed in the past three years was in Jan-March 2023, as buy-to-let mortgages in arrears made up 0.34% of all outstanding buy-to-let mortgages.

Graph
Table

Month	2.5%-5% of balance	5%-7.5% of balance	7.5%-10% of balance	10% of balance
2020 Q1	0.13%	0.05%	0.02%	0.07%
2020 Q2	0.14%	0.06%	0.03%	0.07%
2020 Q3	0.15%	0.06%	0.03%	0.08%
2020 Q4	0.16%	0.07%	0.03%	0.08%
2021 Q1	0.14%	0.06%	0.03%	0.08%
2021 Q2	0.14%	0.06%	0.03%	0.09%
2021 Q3	0.12%	0.06%	0.03%	0.08%
2021 Q4	0.12%	0.06%	0.03%	0.09%
2022 Q1	0.12%	0.06%	0.03%	0.09%
2022 Q2	0.10%	0.05%	0.03%	0.09%
2022 Q3	0.11%	0.05%	0.03%	0.09%
2022 Q4	0.13%	0.05%	0.03%	0.09%
2023 Q1	0.17%	0.06%	0.03%	0.09%

How many buy-to-let properties are repossessed?

In the first quarter of 2023, 410 buy-to-let mortgaged properties were taken into possession, a 28% increase on the previous quarter at the end of 2022.

However, the first quarter of 2020 had the highest number of possessions over the past three years, as 640 properties were possessed. However, this decreased by 80% by the second quarter of 2020, as only 130 buy-to-let properties were possessed. By the end of 2022, a total of 1,450 buy-to-let properties were possessed.

Graph
Table

Month	Buy-to-let
2020 Q1	640
2020 Q2	130
2020 Q3	220
2020 Q4	190
2021 Q1	180
2021 Q2	230
2021 Q3	310
2021 Q4	320
2022 Q1	380
2022 Q2	350
2022 Q3	400
2022 Q4	320
2023 Q1	410

Sources

UK Finance
FCA
ONS
Bank of England
Paragon Banking Group
CBRE

Quick overview

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 were 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.

Mortgages
Table

Month	House purchase (£)	Remortgage (£)	Total (£)
Jul-18	£800m	£2400m	£3200m
Aug-18	£800m	£2300m	£3100m
Sep-18	£700m	£2000m	£2700m
Oct-18	£800m	£2500m	£3300m
Nov-18	£800m	£2400m	£3200m
Dec-18	£700m	£2000m	£2700m
Jan-19	£700m	£2500m	£3200m
Feb-19	£600m	£2300m	£2900m
Mar-19	£700m	£2100m	£2800m
Apr-19	£700m	£2300m	£3000m
May-19	£700m	£2400m	£3100m
Jun-19	£700m	£2100m	£2800m

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 this month (see above).

Lending
Table

Month	House purchase	Remortgage	Total
Jul-18	5,500	14,800	20,300
Aug-18	6,100	13,900	20,000
Sep-18	5,200	12,300	17,500
Oct-18	6,200	15,700	21,900
Nov-18	6,100	15,000	21,100
Dec-18	5,100	12,300	17,400
Jan-19	5,400	15,600	21,000
Feb-19	4,800	14,400	19,200
Mar-19	5,000	13,200	18,200
Apr-19	5,100	14,400	19,500
May-19	5,500	15,000	20,500
Jun-19	5,300	12,500	17,800

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 live in a private rented property, equal to 4 million people. Meanwhile, 64% of Brits are owner-occupiers (14.8 million), while the remaining 17% live in social rented properties (4 million).

Occupiers
Table

Type of residency	Percentage
Owner-occupiers	64%
Private rental	19%
Social rental	17%

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 from buy-to-let mortgages that you have no intention of renting.

Stamp duty

When buying a home, you’re subject to stamp duty rates depending on the property’s price. When purchasing a second home or a buy-to-let property, you’re subject to an increased rate of stamp duty by 3%.