The value of buy-to-let lending jumped by 83% this year to £18 billion when compared to 2020, trade association UK Finance has reported.

Its data shows the landlord market for both new purchases and remortgages rebounding strongly this year, although this hyperactivity is likely to return to more normal levels of approximately £13 billion next year and £12 billion in 2023.

But the overall growth in the buy-to-let market is highlighted by these latest figures and for example in 2010 loans totalling just £5 billion were approved for landlords, despite the additional tax and regulatory burdens they now face.

miles robinson trussle

“It is true that buy-to-lets aren’t the bargain that they once were,” says Miles Robinson, Head of Mortgages at broker Trussle (pictured).

“Changes to tax and the Stamp Duty Surcharge have impacted returns, which made rental the king of investments.

“But this new data shows that property is still seen as a safe and reliable way of generating extra income. This can be both in the short term, through rent collection and long-term gains in house prices.”

Robinson reckons part of the reason for buy-to-let lending growth this year has been a surge of landlords switching to student lets.

“Student rental properties especially remain an attractive proposition for investors, with recent research revealing that student buy-to-lets consistently outpace the rest of the PRS market, by as much as 17.86% in rental yield,” he says.

“Our own research has also revealed that 66% of parents are considering purchasing a buy-to-let property near their child’s university to alleviate living costs during their studies, whilst 53% of parents would consider downsizing to help support their children through university.”

Read the UK Finance report in full.

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