Buy To Let loans fall over long term despite recent sector resurgence

Posted on Thursday, April 28, 2022

Buy To Let may have had a resurgence in the past year but long-term lending patterns suggest landlords have been hit by government changes to tax and regulation.

An analysis by lending service Octane Capital shows that in 2021 the value of residential loans to individuals within the buy-to-let sector totalled £36.9 billion. 

Despite last year being considered a strong one for the private rental sector and landlords buying properties, this marks an eight per cent drop on the £40.1 billion lent in 2016, before a spate of fiscal measures were introduced against landlords.

The most notable legislative changes included the restrictions of tax relief on mortgage finance costs, the abolition of the ‘wear and tear’ allowance, a three increase on the rate of stamp duty payable on buy-to-let homes and an accelerated payment schedule with regard to Capital Gains Tax.

Last year, the £36.9 billion loaned via the buy-to-let sector accounted for just 11.7 per cent of total lending. This marks a drop on 2016, when buy-to-let loans accounted for 16.1 per cent.

Via @LandlordToday