UK Finance’s latest buy-to-let (BTL) mortgage market update for Q4 2024 reports 52,648 new BTL loans, valued at £9.6 billion. This represents a 39.2% increase in the number of loans and a 47.2% rise in total value compared to the same period in the previous year.

The average gross rental yield increased to 7%, up from 6.74% in the previous year. The average interest rate for new BTL loans stood at 5.09%, a decrease of 0.13 basis points from the previous quarter and 0.61 basis points lower than in Q4 2023.

The interest cover ratio rose to 201%, up from 190% in Q1 2024, reflecting a 0.21% increase over the previous year.

Fixed-rate BTL mortgages grew to 1.43 million, an increase of 4.4% over the year. Meanwhile, variable-rate loans declined by 15.9% to 518,000.

There were 12,610 mortgages in arrears greater than 2.5% of the outstanding balance, a reduction of 390 from Q3 2024 and 7% lower than the previous year.

Buy-to-let mortgage possessions remained at 700 for the quarter, unchanged from Q3 2024 but marking a 29.6% increase compared to the same period in the previous year.

These figures highlight ongoing shifts in the BTL mortgage market, with changes in rental yields, borrowing costs, and product preferences shaping market conditions.