Last Autumn saw the 25th anniversary of buy-to-let mortgage products and just last month it was reported that there are the greatest number of BTL mortgages available for 15 years.
2022 began with over 3,500 different products available for new or current landlords, with over 900 more products than just two years ago.
The need for BTL products was seen during the mid-90s, when mortgage agreements often prohibited homeowners from letting out their properties, so in 1996 the first BTL mortgage products specifically tailored to the PRS were introduced. This was spearheaded by the Association of Residential Landlords (ARLA – now Propertymark) working with a small group of lenders.
“It became clear that the mortgage options weren’t suitable,” said Robert Jordan, Former President ARLA Propertymark. “So together we designed a product, buy-to-let, that would enable more investors to purchase an investment property and let it. Paragon and NatWest were the first two mortgage lenders we approached.”
Many in the sector give the introduction of BTL mortgages credit for revamping what was a struggling private rented sector and growing it into the vital part of the country’s housing that it is today. BTL mortgages enabled more individuals to invest in property, resulting in billions of pounds to flow into the sector and as such the PRS saw growth and improvement that otherwise it would not have had. This meant better quality homes have been provided to the millions of people who privately rent across the country.
Over the past 25 years, the PRS has almost doubled in size, with nearly 13 million private renters in the UK and demand continuing to grow. According to figures released by Savills research, the UK PRS was worth £1.338 trillion in July 2021.
“Since being launched as a mortgage product specifically designed for landlords 25 years ago, buy-to-let finance has helped to transform the PRS,” commented Richard Rowntree, MD for Mortgages, Paragon. “The PRS is now a vital component of the UK’s housing provision, with renting no longer a last resort. The PRS is a tenure of choice as well as need and this is supported by the diversity of those who actively choose rented homes, benefitting from the flexibility they provide.”
So much is to be celebrated with the social change that BTL mortgages brought about, and the much-needed homes that PRS landlords are delivering. With the latest news that BTL mortgage product options are at a peak, it gives landlords greater choice when planning their investments. At Pennington we can advise those looking at investing in residential property but without the time, local knowledge or experience needed to buy the best property for maximising return on investment. As a complete package we can then offer a range of letting services too and support landlords through the minefield of legislation now faced.
As always if you need advice on this or anything else on the local property market, please do not hesitate to call me.
