£41.3b Borrowed by Investors to Buy UK Properties: In-Depth Analysis


Government statistics from 2022 reveal a significant rise in the private rental sector in the UK, with England at 15.29%, Scotland at 14.9%, and Wales and Northern Ireland at 14.0%. Leading the way is London, boasting 20.81% of privately rented homes, while the North East of England reports the lowest at 13.27%.

An in-depth analysis conducted by Confused.com, examining government data and figures from the Financial Conduct Authority, highlights that by the end of last year, the buy-to-let mortgage market had reached an impressive £41.3 billion. This marks an 88% surge compared to 2013.

When assessing the rent-to-house price ratio, Blackpool records the smallest at 1:237, contrasting with the Cotswolds, which reports the largest at 1:538. This ratio is calculated by dividing the average house price, sourced from the UK House Price Index, by the average monthly rent provided by the Office for National Statistics.

The Department for Levelling Up, Housing and Communities states that terraced houses (46.1%) and purpose-built flats or maisonettes (38.7%) constitute the majority of rental properties in England.

The landlord landscape in England primarily comprises private individuals, making up 93.7% of the country's landlords. Companies represent just 4.7%, and a combination of private individuals and companies accounts for 1.0%.

Regarding portfolio size, 43% of landlords own only one property, while 39.3% manage between two and four properties. Landlords with five or more properties constitute less than a fifth of the total.

Separate surveys indicate that most landlords plan to maintain their property numbers over the next two years. Those intending to reduce their portfolio or exit the sector often cite concerns about recent and upcoming legislative changes.

Regarding rent adjustments, data shows that for both new and existing tenancies, more landlords increased the rent (45.5% and 26.4%, respectively) than those who kept it the same or decreased it.

As of 2022, the total gross advances for new mortgage loans amounted to £322.5 billion. Buy-to-let mortgages represented 12.8% of this total. However, owner-occupied property mortgages still dominate the market, comprising 87.2% of all mortgages. The value of buy-to-let mortgages stands at approximately £41.3 billion, underscoring the substantial investment in the sector.

Compliance with legal requirements is notably high, with 98.8% of properties having smoke alarms on each floor and 91.4% undergoing electrical installation checks conducted by qualified testers.

You can find more information for a detailed and comprehensive analysis here.

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