This page includes relevant buy-to-let statistics for 2023, such as buy-to-let market stats, including the number of approvals, amount of lending, and its associated value, as well as new buy-to-let rules for 2023, and the best buy-to-let areas to invest in.
Recent buy-to-let statistics show that £8.5 billion worth of properties were bought by UK landlords in the first quarter of 2022 alone.
Buying a property to rent out can prove to be a good source of income, and millions of people are choosing this as an investment opportunity.
However, there are associated risks, and specific rules to follow. If you are a landlord, or considering becoming one, then comparing buy-to-let mortgages available on the market will ensure you find a product that is right for you and your circumstances.
Our research has collated various buy-to-let statistics for the UK in 2023, to analyse trends, judge how the buy-to-let market has evolved over time, and make predictions about the years to come.
£8.5 billion worth of buy-to-let properties were purchased by UK landlords in Q1 2022.
In 2022, more than 211,000 buy-to-let mortgages were approved by UK lenders, and occupied 13.6% of total mortgage lending for the year.
Consumer buy-to-let mortgages in 2022 are valued at approximately £955 billion, with buy-to-let mortgage advances worth £41.8 billion.
There are currently around 2.74 million landlords in the UK, with more than two-thirds (68%) over the age of 55.
Milton Keynes has seen the greatest growth in buy-to-let properties with a 667% increase between 2021-22.
The average UK landlord has eight properties in their portfolio, generating a gross annual rental income of around £61,000 per property.
The private rental sector (PRS) is currently the UK’s second largest housing tenure, consisting of roughly 4.5 million UK households (or 20% of the total).
It’s estimated that PRS supply will have to increase by 227,000 homes a year over the next decade, in order to meet the forecasted demand for 1.8 million new households by 2032.
In 2022, there were over 211,000 buy-to-let mortgages authorised by UK lenders – around double the amount in 2012. Approval numbers for buy-to-let mortgages peaked in 2016, at just less than 240,000, before dropping down to about 179,000 in 2020.
From 2023 onwards, these numbers are forecasted to rise, reaching an expected peak of almost 250,000 by 2032.
|Q3 2020||Q4 2020||Q1 2021||Q2 2021||Q3 2021||Q4 2021||Q1 2022||Q2 2022|
Recent buy-to-let statistics indicate that in Q2 2022, buy-to-let mortgages occupied 13.6% of total gross mortgage advances. This equated to £10.6 billion worth of lending, and was 2.2 percentage points (pp) higher than the previous year. It was also the highest level recorded since Q2 2020.
By comparison, this was the lowest percentage share across all other mortgage purposes. As of Q2 2022, home movers accounted for the largest share of mortgage lending (30%), followed by remortgaging (27%), and then first-time buyers (22.5%).
According to research by the BVA BDRC Landlord Panel via Foundation Home Loans, two in three landlords in Q2 2022 intend to take out a buy-to-let mortgage, in order to fund their next rental purchase. The proportion anticipating a release of equity has also increased, from 11% in Q1 2022 to 28% in Q2 2022.
By contrast, fewer landlords expected to purchase outright using previously invested funds.
Buy-to-let stats for 2022 show consumer buy-to-let mortgages are worth an estimated £955 billion. This is around three times the total market value from 2007, when it was valued at £320 billion.
There’s been a steady rise in mortgage values over the past 15 years, and this is predicted to continue into the coming decade. By 2032, buy-to-let mortgages should be worth over £1.4 trillion, if current trends prevail.
In 2022, buy-to-let mortgage advances were valued at more than £41.8 billion – roughly double the value in 2013. The value of buy-to-let mortgage advances fluctuated considerably over the last 10 years, from £16.1 billion in 2016 to a peak of £40.1 billion in 2016.
From 2023 onwards, buy-to-let mortgage advances are expected to rise in value, from £43.5 billion to almost £69 billion by 2032.
According to recent buy-to-let statistics, 350 buy-to-let mortgaged properties were taken into possession during Q2 2022.
For the first three months of the year, the total number of possessions remained unchanged across all property types. However, buy-to-let mortgage possessions fell by 8%, while the number of homeowner mortgage possessions increased by 5%.
During the same time period, there were 5,640 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance. This was 4% less than in Q1 2022, and 10% less than the previous year.
Since 2010, gross mortgage lending in the UK has gradually increased. By 2021, the 10 largest mortgage lenders in the UK occupied approximately 81% of the mortgage market, with almost two-thirds (63%) belonging to the top five.
By comparing mortgage lenders, we can still see that Lloyds Banking Group had the largest overall market share in 2021. Almost one in five UK mortgages (18%) were assigned by them in 2021, constituting around £56 billion in lending for the year.
NatWest Group and Nationwide BS each accounted for 11% of the market, followed by Santander UK and Barclays at 10%.
With Lloyds recently investing £180 million in its buy-to-let business programme, it’s likely that its dominance will continue for years to come.
Stamp Duty Land Tax (SDLT) in England and Northern Ireland is usually paid on increasing portions of the property price when purchasing a residential property, and only applies to dwellings over £250,000 in value.
The amount paid will depend on a number of factors, including:
When you bought the property
How much you paid for it
Whether you are eligible for tax relief or exemption
The number of properties you own.
|Property (or lease premium or transfer value)||SDLT rate|
|Up to £250,000||Zero|
|The next £625,000 (i.e. the portion from £250,001 to £925,000)||5%|
|The next £575,000 (i.e. the portion from £925,001 to £1.5 million)||10%|
|The remaining amount (the portion over £1.5 million)||12%|
It’s worth noting that an additional 3% will be charged on top of these rates if you own another residential property.
There are also different SDLT rules and regulations for:
New leasehold sales and transfers
Those purchasing six or more properties in one transaction
Shared ownership properties
Multiple purchases or transfers between the same buyer and seller (linked purchases)
Companies and trusts buying residential properties.
Stamp duty in Scotland is called land and buildings transaction tax (LBTT). New LBTT rates were introduced in April 2015, with buyers paying tax on the amount between bands, not on the full purchase price of the property.
The current LBTT rates are as follows:
|Tax band||Normal rate||Additional dwelling|
|Less than £145k||0%||4%|
|£145k to £250k||2%||6%|
|£250k to £325k||5%||14%|
|£325k to £750k||10%||14%|
An additional dwelling supplement (ADS) was introduced in April 2016, and now applies to all transactions involving the purchase of an additional property. This includes buy-to-let investments and second homes.
Much like the rest of the UK, the surcharge applies to the full purchase price above an initial threshold of £40,000. From 25th January 2019, the ADS increased from 3% to 4%.
From the 1st April 2018, Stamp Duty Land Tax (SDLT) in Wales changed to Land Transaction Tax (LTT) and applies to anyone who buys a property or land over a certain price threshold in Wales.
On 27th September 2022, the Welsh Government announced changes to the residential rates and bands for LLT, which came into power from 10th October 2022.
The current LTT threshold is £225,000 for residential properties, if you do not own any other property.
|Price threshold||Land Transaction Tax (LTT) rate|
|The portion up to and including £225k||0%|
|The portion over £225k up to and including £400k||6%|
|The portion over £400k up to and including £750k||7.50%|
|The portion over £750k up to and including £1.5mn||10%|
|The portion over £1.5mn||12%|
There are different rules if you already own one or more properties. The higher rate of LTT will usually kick in when you buy a residential property worth £40,000 or more and you already own one or more other properties.
When renting out a property, you may have to pay taxes.
If your profits are £6,725 a year or more, and what you do counts as running a business (such as being a landlord), you’re required to pay Class 2 National Insurance.
The first £1,000 of your income from property rental is tax-free (known as your property allowance). Anything above this has to be declared to HMRC.
For companies, the rental income is calculated exactly the same as any other business income. However, there are different tax rules for residential and commercial mortgages, as well as furnished dwellings and those with a holiday-let mortgage.
You and your company, for example, must pay tax on the profit you make from renting out the property after deductions have been made for ‘allowable expenses’. This refers to any expenses associated with the day-to-day running of the property, such as:
Fees (for letting agents, accountants, and legal purposes)
Rents, service charges, and maintenance/repair costs
Other ancillary costs (such as phone calls, stationery, and advertising).
Also, depending on your circumstances, government support in the form of tax relief may also be available to help reduce costs.
For more information, you should consult the latest government advice for renting out your property
For the 2021-22 tax year, landlords will pay 20% tax on buy-to-let income between £12,571 and £50,270. Once this upper threshold has been exceeded, the rate increases to 40%.
The additional rate (45%) remains unchanged at £150,000.
Different rates of pay are in place for residential properties compared to other assets.
If you’re a higher or additional rate taxpayer, then you’ll pay:
28% on your gains from residential property
20% on your gains from other chargeable assets.
If you’re on a basic rate of tax payment, the rate will depend on the size of your gain, your level of taxable income, and where your gain is from (i.e. residential or other assets).
If you fall within the basic income tax band, then you’ll pay:
10% on your gains (or 18% on a residential property)
20% (or 28%) on any amount above the basic tax rate.
Remortgaging a buy-to-let property involves switching to a new mortgage deal for a property you already rent out. This could involve moving to a different lender, or staying with your existing one and negotiating a new deal.
Research by Foundation Homes Loans, via the HomeOwners Alliance (HOA), found that in 2021, 30% of landlords planned to remortgage within 12 months, with the intention of releasing equity from their portfolio.
If you’re a landlord and considering this as an option, it’s advised to compare equity release mortgage deals first, to ensure you select a product that is right for you.
As of November 2022, UK interest rates rose from 2.25% to 3%. The 12-month CPI inflation rate also rose to 10.1% in July, before dropping slightly to 9.9% in August. As of December 2022, this stood at 10.5%.
In an attempt to further combat high levels of inflation, the BoE increased the base rate further to 4% on 2 February 2023.
Both of these factors could have a significant impact on whether landlords choose to remortgage, as the cost of living crisis continues to grow and people are looking to save money where possible
Research by the BVA BDRC Landlord Panel (via Foundation Home Loans) indicated that if interest rates rose by 2%, then just under a fifth (18%) of landlords would be forced to sell a property, compared to 10% for a rate increase of 1%. Should the base rate exceed 4%, just under a third (30%) of landlords declared they would have to diversify all, or part, of their portfolio.
If remortgaging a buy-to-let property is something you might be considering, you will need to:
Calculate the Loan to Value (LTV) you require. For example, if your rental property is worth £400,000 and you need to borrow £200,000, your LTV would be 50%. Generally speaking, lower LTVs can access a wider range of mortgages with better rates.
Compare remortgage deals via an expert mortgage broker in order to find the best one for you.
When it comes to buy-to-let mortgages, lenders will treat your application differently compared to a standard residential mortgage. This is because your borrowing is based on how much rent you can potentially generate. Therefore, how long it takes to get a mortgage can vary from lender to lender.
Rental income will typically need to meet at least 125% of the monthly mortgage payments, but this can rise to 145%, depending on the lender. A minimum salary is also normally required of around £20,000 to £25,000.
You can start looking for buy-to-let remortgage deals around six months prior to your current deal ending. This is because most mortgage deals are valid for six months, meaning you can lock in a new rate and switch your mortgage when your current deal comes to an end, avoiding an early repayment charge (ERC).
Buy-to-let mortgage statistics from the ONS suggest there are around 2.74 million landlords in the UK, based on the number of individuals who declare income from a property on their Self-Assessment tax returns.
Buy-to-let investors and tenancies are most likely to be aged between 55-64 years old (31% vs 35%), closely followed by the 65-74-year-olds (24% vs 25%). Cumulatively, this means that almost two-thirds (63%) of landlords are over 55, with the median age being 58 years old. This is slightly more for tenancies, with more than two-thirds (68%) aged over 55.
Becoming a buy-to-let landlord is not easy. It requires time, patience, and capital. This might help to explain why approximately a third (32%) of landlords are retirees, compared to 34% for tenancies, with 15% under the age of 44 for landlords and 11% for UK tenancies.
|Ethnic group||Percentage of the landlord population (%)|
|Pakistani or Bangladeshi||1%|
(Source: English Private Landlord Survey)
The gender split amongst UK landlords is also fairly even, with just over half (55%) identifying as male. On the other hand, ethnic representation is not evenly distributed amongst the UK landlord population, with 88% identifying themselves as White, followed by 4% as Indian, 2% as Black, and 1% from Pakistani or Bangladeshi origin.
|Reason for becoming a landlord||Percentage (%)|
|Preference to invest in property||42|
|Contribution to pension||40|
|To supplement income||35|
|Provide a home for relative or friend||6|
|Inherited or was given property||6|
|To let property as full-time business||4|
|Could not afford a mortgage to live in||1|
(Source: English Private Landlord Survey)
When asked for their motivations to become a landlord, 42% said they wanted to invest in a property, with 40% stating it was a way to contribute to their pension or supplement an income (35%).
Very few claimed it was to provide a home for a friend/relative, or that they had inherited the property (both 6%).
|How landlords operate their lettings business||National percentage (%)|
|As an individual or group of individuals||94%|
|Mixed - part individual, part company||1%|
|Part of a company||5%|
The overwhelming majority of landlords (94%) choose to operate on their own, or as part of a group of individuals. This is contrasted by one in 20 (5%) who work as part of a company.
Only 1% opt for a mixed approach, with some of their portfolio managed by themselves, and the rest with a company/agent.
Terraced housing is the most popular type of property owned by UK landlords in 2022. More than half (54%) own this type in comparison to 47% for individual flat units, and 44% for semi-detached houses. Almost one in five (21%) landlords own houses in multiple occupation (HMO).
The least popular options are short-term/holiday lets (3%) and bungalows (9%).
Buy-to-let stats show an increase in mortgages written for semi-detached housing. 40% of landlords surveyed, who were looking to purchase a new rental property in 2022, said they intended to secure a semi-detached house (in comparison to 39% for terraced housing).
Under the current guidelines, landlords must ensure that rental properties have a minimum EPC rating of E before advertising and letting their property to tenants.
Green mortgages are also available on the market to offer buyers an incentive to make their property more energy efficient.
However, you can register for an exemption if your property doesn’t meet certain requirements, such as:
If you exceed the maximum cost cap for improvements (£3,500 per property, including VAT, and any outside funding, such as grants)
If any work would damage or devalue the property (with evidence from a qualified surveyor)
An inability to obtain third-party permissions.
Any exemption is valid for five years, and a temporary six-month exemption is available for new landlords.
A proposed plan is in place to raise the minimum EPC from E to C. This is expected to come into play from April 1st 2025, for new tenancies, and April 1st 2028, for existing tenancies.
The cost cap is also predicted to rise, from £3,500 to £10,000 per property. According to the UK Government, this would sufficiently bring 90% of D-rated properties, and 60% of E-rated properties, up to a C-rating.
In addition, the UK Government is expected to introduce a ‘fabric-first policy’, which would regulate the order in which work is carried out. Improvements to the fabric of the building (such as insulation, windows, and doors) would be required before additional measures, like new heating systems, are installed.
According to recent buy-to-let statistics, UK landlords are most likely to live in the south of England. More than 50% operate in the South East, South West, or London, with more than a quarter (26%) in the South East alone.
In 2021, buy-to-let growth was greatest in Milton Keynes, with a 667% increase in the number of buy-to-let properties compared to the previous year. This is more than double the rate of growth for Manchester and Bristol, who both experienced triple growth in the number of buy-to-let completions during 2021.
The growth rate was almost double (95%) in London in the same period, compared to 70% for Cardiff, and 64% for Nottingham.
A new Uswitch study identified the best areas for landlords looking to rent to university students, as well as the worst.
This study involved collating data for each UK university based on:
Average house price of the surrounding area
Average student rent per week of rental properties in the town/city (and calculating the resulting annual income for landlords)
The percentage of students (both total and international) who privately rent.
Finally, the universities and corresponding towns/cities were scored and ranked out of 10. The average house price and weekly rent were double-weighted in the final score, as these were deemed to be the most important factors.
|University||City||Avg. house price (£)||Avg. student weekly rent (£)||Student yearly rent (52 week tenancy estimate) (£)||Total renters %||International students %||Final score|
|Royal Conservatoire of Scotland||Glasgow||198,747||180||9,360||52.3||31.5||8.05|
|The University of Edinburgh||Edinburgh||324,801||222||11,544||52||39.7||7.43|
|Robert Gordon University||Aberdeen||192,930||180||9,360||48.1||16.4||7.14|
|The University of Glasgow||Glasgow||198,747||160||8,320||45.7||30.5||7.13|
|University of Cumbria||Carlisle||147,886||172||8,944||52.8||3.2||7.04|
|Imperial College of Science, Technology and Medicine||London||691,018||190||9,880||55.6||50.9||6.77|
|The University of Lancaster||Lancaster||192,685||135||7,020||50.4||31.1||6.74|
|Glasgow Caledonian University||Glasgow||198,747||196||10,192||35||11.8||6.73|
(Source: Uswitch via Save The Student, Rightmove, and Higher Education Statistics Agency)
According to the study, the top five UK universities for landlords to buy, and rent to students, are all located in Scotland.
The Royal Conservatoire of Scotland (RCoS) comes in first place and is crowned the best buy-to-let area to make a purchase, with an overall score of 8.05 out of 10. It’s by no means the cheapest university city in the country to buy a property, as the average house price will set landlords back just under £200,000. However, it could generate a return of £180 a week (almost £9,400 a year).
Narrowly in second place is The University of Edinburgh, with a final score of 7.43 out of 10. Average house prices here are £125,000 more expensive than the RCoS, yet will generate £222 a week (or £11,544 a year).
This is the second highest amount for landlord earnings in the country, beaten only by The University of Greenwich, which doesn’t even make the top 10. The average house here will set you back £691,000 – more than double compared to the University of Edinburgh – yet weekly earnings are only £16 a week (or £832 a year) more.
The University of Cumbria, in sixth place, is the first English university to feature in the top 10. At £147,000, average house prices here are the second most affordable in the country, after Teesside University (almost £144,000), and will generate the average landlord just under £9,000 a year.
Despite more than half of Carlisle university students (53%) choosing to privately rent, for international students it is just 3% – one of the lowest in the country.
By contrast, of those students from London’s Imperial College of Science, Technology, and Medicine in seventh place, almost 56% of their overall student population, and 51% of international students, will privately rent – the third highest percentage in the country. However, average house prices here are around £691,000 (more than four-and-a-half times dearer than Carlisle), yet will only generate an extra £936 a year by comparison.
|University||City||Avg. house price (£)||Avg. student weekly rent (£)||Student yearly rent (52 week tenancy estimate) (£)||Total renters %||International students %||Final score|
|Brunel University London||London||691018||110||5720||23||27.6||2.26|
|Oxford Brookes University||Oxford||549042||115||5980||36||15.9||2.27|
|London Metropolitan University||London||691018||108||5616||64.8||9.2||2.88|
|The University of Surrey||Guildford||588197||114||5928||43.4||28.2||3.14|
|Anglia Ruskin University||Cambridge||538726||106||5512||62.6||15.3||3.28|
|Bath Spa University||Bath||589242||128||6656||59.6||6||3.31|
|Harper Adams University||Newport||227098||98||5096||44.8||5.2||3.33|
|University of Gloucestershire||Cheltenham||375584||128||6656||50.9||6.2||3.35|
(Source: Uswitch via Save The Student, Rightmove, and Higher Education Statistics Agency)
According to the study, Keele University ranks lowest of all UK universities, for landlords looking at buying property and renting to students.
With a score of 1.83 out of 10, average house prices are fairly expensive around Keele University, at virtually £428,000. However, properties will only generate £111 a week (or £5,772 a year) in rent, on average, for landlords. Just over a third (36%) of its student population are renters, followed by nearly 7% of international students.
Whilst these figures are not alarmingly low, or the worst in the country, Keele University’s final score is the product of scoring relatively low across all variables in our study.
Brunel University, ranked second lowest, has an average house price of £691,000 – more than 1.5 times greater than Keele University. Despite only 23% of their student population turning to private renting, almost 28% of their international student body do, giving them a larger captive rent audience in comparison to Keele.
Harper Adams University in Newport, Wales, has the most affordable housing in the bottom 10, at £227,000. Yet, average weekly earnings here are the sixth lowest in the country at £98 a week (a little over £5,000 a year).
A landlord’s level of experience is split into two categories:
Non-portfolio (fewer than four buy-to-let properties)
Portfolio (more than four buy-to-let properties).
Almost 40% of landlords have been operating lettings for between 11-20 years – the highest proportion of the surveyed landlord demographic.
Around a third (30%) of portfolio landlords have been letting properties for 21-30 years. This is roughly the same percentage of non-portfolio landlords who have rented to tenants for 0-5 years.
In Q1 2022, a typical UK landlord held a portfolio with an average of eight properties, totalling about £1.38 million. Each property was valued at an average of £172,625, generating £635 per calendar month. In terms of gross annual rental income, this would constitute £61,000.
Buy-to-let statistics obtained from Paragon show less than half (43%) of UK landlords rent out one property, compared to 39% who have between 2-4 properties on their books. The numbers then drop fairly quickly, with more than one in 10 (11%) owning between 5-9 properties, and less than one in 20 UK landlords (4%) responsible for 10-24 lettings. In contrast, the figures for companies and organisations are far more evenly distributed. Almost a third (32%) have between 2-4 properties on their books, followed by a fifth who only have one. 18% have between 5-9 properties to rent, compared to 16% who have between 10-24. Around one in 10 (11%) letting agents have 25-100 rental properties in their portfolio, with 3% having in excess of 100.
Landlords who have been letting out longer often have a larger portfolio. Over two-thirds (68%) with 11+ years experience had two or more properties on their books, compared with 45% of those with four to 10 years. Comparatively, this was less than one in five (19%) for those with three years or less experience in the buy-to-let market.
|Years of experience||Percentage of landlord population (%)|
|Three years or less||8.60%|
|Four to 10 years||38.50%|
|11 years or more||52.90%|
(Source: English Private Landlord Survey)
Over half (53%) of landlords have 10 years or more experience in the PRS, compared to around one in nine (8.6%) who have been doing the role for less than three years.
|Source of funding||Percentage of landlords (%)|
|Owned on a buy-to-let mortgage||35%|
|Some owned, some buy-to-let||29%|
(Source: BVA BDRC via Paragon Bank)
One of the main advantages of a buy-to-let mortgage is that they’re often provided as an interest-only mortgage. This allows lower monthly repayments compared to a repayment mortgage, providing landlords with more freedom and financial flexibility.
Perhaps unsurprisingly, therefore, buy-to-let statistics show borrowing is a popular with property investors, with almost two-thirds of landlords choosing at least part of their portfolio through this method. More than a third (36%) have opted to self-fund or purchase the property outright.
The typical number of buy-to-let mortgages per borrowing UK landlord is 4.5, increasing to 11.1 among those with 11 properties or more. In terms of buy-to-let borrowing, the average UK landlord owed almost £420,000.
In addition, according to ONS figures, one in three (33%) landlords with a buy-to-let mortgage owned just one property, in contrast to nearly two-thirds (62%) with other types of loans. Incidentally, just over half (53%) of landlords with no loans were single-property owners.
|Statement||Percentage of landlords who agree with the statement (%)|
|There is enough information online to make my own decisions||14%|
|I value advice but tend to balance it with my own research||73%|
|I fully rely on financial advisers to inform my decisions||13%|
Only 14% of respondents agreed that there was enough information online to make their own decisions. This implies that 86% don’t believe online information is sufficient on its own, and might help to explain why almost three-quarters (73%) of landlords supplement online info with their own research before making any decisions. Likewise, only 13% fully relied on the services and advice of their financial advisers, suggesting landlords tend to get their information from multiple sources before deciding to purchase a buy-to-let property.
According to a survey by Paragon Bank with their member landlords, more than half (54%) of landlords are influenced by interest rates when it comes to buy-to-let purchases.
Four in every 10 landlords also indicated that recommendations by an intermediary was an important deciding factor in their decision-making process.
Around one in six (15%) said they would make decisions based upon the reputation of the lender, compared to just over a quarter (27%) who said they were guided by their previous experiences with a lender, in this case, Paragon.
|Source of information||Percentage of landlords who use this for industry updates and sharing knowledge|
(Source: Paragon Bank)
In the face of a dynamic property market, UK landlords need a space they can turn to for industry updates, and to exchange knowledge within their communities. Many are turning to social media to achieve this.
Facebook appears to be the most popular option (38%), followed by just a third (32%) opting for LinkedIn. Nearly a fifth (19%) will head for Instagram, whereas around one in six (15%) will use Twitter.
However, for news updates, landlords are likely to turn to news outlets, with over three-quarters (77%) choosing the BBC, followed by almost a third (31%) for Sky News.
|Business topic||Percentage of landlords who selected this option (%)|
|Finance and investment||38%|
|Market conditions and trends||37%|
|Property refurbishment and adaptation||35%|
(Source: Paragon Bank)
Landlords were also asked by Paragon Bank as to what business topics they were most interested in reading about. Tax planning was the most popular, with almost half (48%) selecting this option. This was followed by finance and investment (38%), and market conditions and trends (37%).
With property prices unattainable for large sections of the UK population, the demand for rental properties has understandably increased. In 2000, 10% of homes in England were privately rented. By 2017, this had more than doubled. As of 2020, it had dropped slightly, to around 18.5%.
According to a 2022 report by Property Mark, 73% of agents reported an increase in the number of tenants renewing their rental contracts over the last year.
Furthermore, an average of 127 new prospective tenants registered per branch within the last 12 months, yet only an average of 11 properties per branch. Given this lack of stock on the rental market, it’s little surprise that tenants are choosing to stay in their current accommodation rather than move.
In addition to this, 74% of Property Mark’s member agents reported month-on-month increases in rent prices in September 2022. This is down slightly from the record-high of 82% in July, but more than double the pre-pandemic average of 34% between 2015-19.
They also discovered that the number of new tenant registrations rose to a new average peak of 147 per member branch in September 2022. There has been a general upwards trend in these figures since February 2022, when just under 80 new registrations were taking place on average per branch.
Members of Property Mark reported an average of 11 properties available to rent in September 2022. However, the supply of available homes to rent has stagnated and has not risen in the last four months prior to this. This is an improved picture from an average of five rental properties per branch in February 2022, but a long way short of meeting the current demand for rented accommodation.
According to the 2022 RICS Residential Market Survey, tenant demand is continuing to rise throughout 2022, with a net balance of +36% of respondents reporting an increase in July alone. However, it does appear to have lost momentum, with corresponding figures of +62% and +50% in Q1 2022 and April 2022, respectively.
With regards to supply, a net balance of -8% new landlord instructions was reported for July 2022. As a result, rents are expected to rise in the short term by a net balance of +57%, for those surveyed.
The 12-month price change in the cost of private rental charges for UK properties initially was on the decrease between 2016 and 2019, from +2.6% in Q1 2016 down to a low of +0.9% in Autumn 2019. Since June 2021, the annual change in rent prices have rapidly risen from +2.1%, to a peak of +3.4% in August 2022.
The rest of the UK, excluding London, followed a similar pattern, although less extreme. February 2017 was the first time in recent history that annual changes to UK rent exceeded the national average as a whole, and it has remained that way ever since. As of August 2022, this stood at +3.9%.
London, by contrast, has seen major changes over the last six years in average rental prices. In January 2016, the 12-month change reached a peak of +3.9%, before heading on a rapid decline to -0,3% in the summer of 2018. Fluctuations have occurred since then above and below 0%. However, since January 2022, they have remained in the positives, and increased rapidly up to 2.5% in August.
Since 2016, most countries of the UK have remained positive for their 12-monthly change to rent prices. This is with the exception of Scotland, which between September 2016 and May 2017, saw slight fluctuations above and below 0%.
All four nations generally experienced low and steady change over the last six years. Since October 2017, Northern Ireland saw the biggest increase in its annual rent change and has sustained this title ever since. In August 2022, rent was 8.4% higher in Northern Ireland compared to the previous year. Comparative figures for the rest of the UK were 3.6% (Scotland), 3.4% (England), and 2.5% (Wales).
Throughout 2022, there have been some regional variations in the changes to rental prices. All parts of England have seen growth, albeit at varying levels and rates. For example, London saw the biggest change across 2022, by 2.4%, compared to just 0.3% for the West Midlands.
The East Midlands experienced the largest growth in rent over the last 12 months, at 4.5% as of August 2022. This is compared to 4.3% in the South West, and 4.1% in both the North West and East of England.
By contrast, London has seen the smallest overall year-on-year growth in rent prices, at 2.5%, followed by 3% for the North East, and 3.4% for the West Midlands.
As of 2021-22, ONS figures suggest that 30% of all households in the private rented sector (PRS) included dependent children. This equates to around 1.3 million households.
Buy-to-let statistics show that UK landlords are more likely to rent accommodation to families with children, with more than one in six falling into this category. This is followed by young couples (55%) and young singletons (48%). Just over a third (36%) are older, single residents, with less than one in three (29%) coming from the older couples group—the least common.
UK landlords also provide homes to a wide range of professions, and socioeconomic groups across the country. More than half (52%) of tenants are from a professional/white-collar background and constitute the most common group. This is followed by manual workers/blue-collar workers at 44%.
Less than a quarter (24%) of tenants claim Universal Credit, and one in five are from the student population.
|Response to the survey||Percentage of respondents (%)|
(Source: Paragon Bank)
An overwhelming majority (91%) of UK landlords surveyed feel they have a positive relationship with their tenants. This might help to explain why 88% of landlords said they felt they had been very/extremely flexible with tenant requests.
Approved requests that were reported by landlords included:
Reducing rent during the Covid-19 pandemic
Upgrading broadband to meet the needs of tenants
Fitting new, high-end kitchen at tenant’s request
Adding a vegetable patch during Covid-19 lockdown
Wavering 18 months worth of rent during Covid-19 and agreeing on a flexible repayment plan over the following two years.
8% felt the relationship they had with their tenants was neutral, and just 1% felt they had a negative experience with those renting their property.
When asked if tenants were happy with their current arrangements, Paragon found that the overwhelming majority (81%) were pleased with the property, and 85% were satisfied with their landlord. Tenants most appreciated not having the responsibility for repairs, maintenance, buildings insurance and/or ground rent costs.
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(Source: Paragon Bank)
Around six in 10 (61%) of landlords surveyed said they allowed pets in their properties in some description. However, only 13% said they always allow tenants to keep animals. Just under half (48%) said they did, but only in some circumstances. Almost one in four UK landlords said they never allow renters to keep pets.
According to buy-to-let stats obtained from Paragon, over a third of UK landlords (36%) experienced rental arrears within the last 12 months. This was the most common issue faced by the landlord population within the last year.
Almost a quarter (24%) dealt with property damage by tenants, followed by 23% who had to withdraw all or part of a deposit.
13% had to either deal with antisocial behaviour from tenants or were in possession of a vacant property since 2021, with just over one in 10 (11%) forced to use legal services within the last year.
Research by the National Residential Landlords Association (NRLA) in 2022 confirmed how investors feel about the buy-to-let process.
Three-quarters of investors surveyed admitted that the property purchasing process decreased their passion to buy, whilst 89% demanded a faster, more streamlined process. Nearly all respondents felt a faster experience would automatically equate to a better experience.
The buy-to-let process can be slow for a number of reasons.
Investors often rely on third parties to share information promptly, which ultimately results in delays.
Property searches are often a time-consuming element of the process. 93% of investors claimed that finding the perfect property is too difficult and takes too long.
There seems to be an issue with quality and finding an investment that will work, either as a second income, or a vehicle for capital growth. 75% of investors feel there are enough properties on the market, so supply is clearly not an issue. Two-thirds of investors reported low/declining quality over the last 12 months.
Property investors appear to lack trust in the market as a whole, but also with other stakeholders involved in the property buying process. Only 11% could trust mortgage providers, whilst 29% felt safe in the hands of estate agents, and 34% trusted their mortgage brokers.
An increase in the cost of purchasing was also a determining factor, resulting in frustration among investors. 95% admitted the cost of buying had increased over the last year, with 5% saying it has remained about the same. 70% of respondents also claimed that advisors, brokers, letting agents, and property managers were most likely to request fees unexpectedly, driving up the cost of buying.
Three-quarters of investors surveyed have experienced a recent purchase. However, one in three UK property purchases now falls through, meaning investors will spend over £2,000 with nothing to show for it. This will undoubtedly lead to higher prices and further frustration with the property-buying process.
Consent-to-let agreements can often be seen as an effective solution for an under-utilised dwelling, which is regarded as somewhere that is uninhabited for more than 30% of the year. It can be furnished or unfurnished, as well as unoccupied for the short or long term. The property might even be inhabited for most of the year, apart from when the owner is away for a length of time.
Research by Property Mark found that 70% of the British public have let out a property in which they usually live, with 16% letting out part of their existing home. 12% used STLs as a gap filler between longer rentals.
When surveyed by Property Mark:
58% of people reported the number of STLs in their local area had increased between 2018-22.
28% said that it had remained constant.
13% indicated a reduction in the number of STLs over this period.
A popular option for short-term/holiday lets in the UK is via Airbnb. As of September 2022, there were approximately 70,000 Airbnb listings in London alone, compared to almost 8,000 in Edinburgh, more than 4,000 in Manchester, and about 2,500 in Bristol.
A recent Uswitch study found that Manchester and London ranked second and tenth, respectively, in the best European cities for Airbnb mortgages, in terms of how quickly you could pay off your mortgage.
On average, a property in Manchester would require at least seven nights a month to cover the monthly mortgage repayments, and just over 2,000 nights to fully repay the mortgage. This is contrasted by London, where the average property would require 11 nights a month to cover monthly mortgage costs, and almost 3,300 nights to repay the mortgage.
Based on these figures, it would take the average landlord around five-and-a-half months to repay their mortgage in Manchester, compared to almost nine years in London.
Of those who reported seeing growth in the number of STLs:
38% said the primary reason was a transfer of property from the private rental sector (PRS).
34% believed this was due to a specific property purchase to let in the STL market.
23% claimed the growth was linked to the letting out of a second home that wasn’t in use.
In addition to this, there have been other factors at play, to cause a rise in the number of UK STLs:
The Covid-19 pandemic (as more people are opting for staycations, rather than travelling abroad).
The impact of government legislation and taxation that discourages the PRS.
A rise in rent-to-rent practices (when a property is let with the intention of sub-letting to a third party).
Agents have reported an increase in STLs due to rent-to-rent, as budding entrepreneurs look to cash in on the STL market without purchasing or owning the property in which they live. They also reported a growing trend of ‘try-before-you-buy’ when it comes to housing, where potential homeowners will take out an STL before making a purchase, to see if they like the area first.
44% of respondents from Property Mark’s survey stated STLs were more popular due to incentivised investment in second home mortgages.
Data from the Department for Levelling Up, Housing & Communities (DLUHC) shows there are almost twice as many dwellings listed as empty as there are for second homes (468,000 vs 253,000, respectively).
However, the issue is that these properties aren’t evenly dispersed across the country. For example, 76% of people who felt STLs had increased in their area lived in a tourist hotspot, compared to 33% for non-tourist hotspots. In addition, just under 80% lived on the coast, compared to 50% in non-coastal settings.
As an investor, deciding on the best place to buy a holiday home in the UK is no easy task. Both the ownership of second homes and STLs come with their own benefits and drawbacks, both from the perspective of the homeowner and also for the communities in which they are situated.
Flexibility to use property how you want
Reduced regulatory environment (compared to private renting)
Rise in house prices will benefit those looking to sell
Flexibility for tenants
Try-before-you-commit to an area (long term)
Can be utilised for holidays/short breaks
Agents can expand business and profits
Economic boost to the local area from tourism
Occupation of an otherwise empty property
Issues with antisocial behaviour
Additional traffic/congestion associated with holidaymakers
Security concerns with the frequent footfall of people
Incentives for landlords to leave the private rental sector (PRS), meaning less for locals to rent
Additional effort required to manage the property (e.g. complaints from neighbours and late-night calls)
Rising house prices will make it less affordable for people looking to buy
Drives up property prices, making it difficult for locals to get on the property ladder.
Research by the Greater Manchester Tenants Union (GMTU) and Greater Manchester Tenants Action (GMTA) found that with a 60% occupancy rate, the average cost for a two-bedroom flat in the Manchester area was £95. This would generate £1,710 a month. This compares to £800-£1,000 a month for the average long-term rented apartment. With an 80% occupancy rate, the landlord could push their earnings up to £2,300 a month.
As it stands, STLs aren’t regulated, and not required to meet the same standards set out by the PRS. This has made STLs appear a much more attractive option for investors, landlords, and agents. Between 5-10% of agents have at least one STL on their books. However, in the grand scheme, STLs made up less than 2% of the average agent’s portfolio in March 2022.
When surveyed by Property Mark, 57% of estate agents believed the rise of STLs would have no impact on the sales market, whereas 23% thought it would have a positive impact.
The main reasons for this included:
Providing an incentive for investment
The ability to keep market chains flowing
As people became disenchanted with STLs, this would lead to more re-sales and increase market stock.
However, 21% of estate agents thought STLs would have a negative impact on the property sales market.
This was largely due to:
Antisocial behaviour making it more difficult to sell a property
Properties not being looked after in the same way as standard rented accommodation
Owners holding onto properties for longer, reducing supply
Increased demand and price of properties will make it harder for people to save for a deposit and get onto the property ladder.
As part of the survey, 37% of property agents reported problems with antisocial behaviour, which mainly complaints from local residents surrounding excessive noise and parties. Many also reported difficulty in selling adjacent properties, due to concerns by prospective buyers of living in such close proximity to an STL property.
69% of letting agents believed STLs would have a negative impact on the PRS, with 22% believing there would be no impact, and 9% stating the effect would be positive.
Of those letting agents surveyed, 41% were concerned about the impact of STLs on the PRS, compared to 54% of those who said the impact would be negative.
The reasons for this centred around the following:
Reduced supply as properties switch from the PRS to STLs
Additional pressure on rent and affordability
Putting agents out of business due to low supply.
Anyone who lets out a room can benefit from initiatives such as rent-a-room relief, allowing people to claim up to £7,500 tax-free from renting out a spare room.
In contrast, landlords of rented accommodation have seen their tax burden increase over recent years, including:
Higher rates of stamp duty for buy-to-let properties
Removal of tax relief on mortgage interest costs and replaced with a 20% tax credit
Removal of the 10% ‘Wear and Tear Allowance’ for fully-furnished properties and replaced with an at-cost relief scheme
28% Capital Gains Tax (CGT) for a rented property, when it was reduced to 18% for other assets
A projected rise in corporation tax from 19% to 25% from 2023.
The growth of STL properties managed by agents is also reflected in the figures, rising from 1% of their total portfolio in March 2019, to 1.7% in March 2022.
The Scottish Government introduced legislation for local authorities (LAs) to require STLs to be licenced. The scheme came into force on October 1st 2022 but, so far, only Edinburgh has outlined plans to enforce the scheme. Once in place, all STLs will require a licence before new booking can commence.
The Welsh Government has consulted on proposals to create new use classes for second homes and STLs. This will enable local planning authorities to manage their development through the General Permitted Development Order (GDPO) 1995, as well as extend powers to instil occupancy restrictions on any new-build property.
The UK Government recently concluded a consultation on developing a tourist accommodation registration scheme in England. The Deregulation Act 2015 caused a relaxation in restrictions, meaning dwellings in London could be used as temporary visitor accommodation (for up to 90 days in a calendar year), without the need for planning permission.
Analysis by Property Mark, using Inside Airbnb data, shows that as of September 2022, 40% of properties listed as ‘entire home/apt’ were available for more than 90 days. This equates to 16,640 homes that could otherwise be occupied by long-term tenants, which would ease pressure and supply in the PRS.
68% of agents surveyed by Property Mark would welcome a licensing scheme with physical checks by the UK Government. This figure rose to 74% for those in coastal areas, 74% for tourist hotpots, and 79% for those concerned about the impact of STLs on the PRS.
The Covid-19 pandemic impacted virtually every corner of our lives, and none more so than the buy-to-let mortgage market in terms of sales, approvals, and house prices.
The number of buy-to-let mortgage approvals plummeted from over 200,000 in 2020 to 179,000 in 2020.
At the beginning of 2020, buy-to-let mortgages accounted for 14% of total mortgage lending. By Q2 2020, this rose to 14.4%, before dropping to 12.5% in Q3, and 11.2% in Q4 of the same year.
The value of buy-to-let mortgages continued to rise, from £854 billion in 2019, to £896 billion in 2020.
However, the value of advances dropped from £36 billion to almost £32 billion in the same time period.
The change to house prices was fairly negligible, with only a slight decrease of around £2,000 on the average property.
That said, house sales decreased considerably from 69,000 in March 2020, to just 28,000 in April and 36,000 in May. By December 2020, there was a rebound spike in sales, exceeding 104,000 for this month alone.
The 12-month percentage change in house prices was noticeable, going from 2.5% in March 2020, to just 0.7% the following month. December 2020 again felt the rebound effect of this, with the annual percentage change in house prices rising to 7%.
Changes to average rental prices were fairly small. However, the introduction of rental reforms were delayed several times due to the pandemic.
In October 2022, the UK Government announced a number of economic changes, as part of its mini-budget.
The basic rate of income tax will remain at 20%, and cutting it has been put on hold “indefinitely”.
A proposed cut to the higher rate of income tax was abolished, meaning a 45% rate will still apply for earnings over £150,000 for taxpayers in England, Wales, and Scotland.
Corporation tax will rise from 19% to 25% in April 2023, as already outlined.
National Insurance tax was reduced by 1.25% (a reversal of the 1.25% rise introduced in April 2022).
No stamp duty will be paid on the first £250,000 of a property’s value – a retained policy.
Buyers of second properties, including buy-to-let landlords, will still have to pay a 3% stamp duty surcharge in England (4% in Scotland and Wales).
This is all part of the Government’s plan to drive economic growth and stimulate the housing market. The intention is to increase demand for property, whilst generating supply by encouraging more people to sell.
Landlords looking to expand their portfolio could benefit from a wider variety of properties to choose from. However, this could cause another price hike. Landlords looking to sell, on the other hand, could be advantaged through faster completion rates and higher prices.
Landlords who own their properties through a limited company will benefit from the proposed rise in corporation tax in 2023, as they won’t be hit with a higher tax bill.
The return of lower National Insurance rates will see landlords pay less tax, with the higher earners benefiting the most. Because of this, the Treasury estimates around 28 million people across the UK will see an extra £330 a year in their pocket.
In June 2022, the UK Government released a rental reform white paper, outlining some of the proposed changes to the way UK private rentals are managed.
Landlords will need a “good reason” not to allow pets.
Tenants can challenge a decision by their landlord to not allow pets. Almost a third (30%) of tenants who moved home in 2022 claimed this was to accommodate a pet (a rise from 7% in 2021), making it the most common reason for moving in that year.
Landlords can require tenants to have insurance, to cover property damage by pets.
The Decent Homes Standard will be extended to include privately rented housing
Section 21 evictions will be scrapped (meaning tenancies will only end if a tenant chooses to, or a landlord has a valid reason to evict, as defined by the law).
Landlords will no longer be able to implement a blanket ban on those with children and/or anyone who claims government benefits.
All tenants will be moved onto periodic tenancies. This means they can move out of poor-quality housing without having to pay rent, or if their circumstances change.
Notice periods for rent increases will be doubled (allowing tenants to challenge decisions they deem to be unjustified).
More powers for councils to tackle criminal landlords.
A Private Renter’s Ombudsman will be set up to resolve disputes between landlords and tenants without involving court action.
Landlords can gain possession of their property from anti-social tenants.
A property portal will be established to provide information for tenants and landlords on performance and obligations.
These changes are designed to make the rental process fair, proportionate, and smoother for both landlords and tenants.
According to Property Mark, the number of homes for sale rose by 50% between April and September 2022, from an average of 20 to 30 per member branch—the highest figure within the last 12 months.
Conversely, the number of new applicants remained steady between April and September 2022, at an average of 83 per branch (only slightly up from the summer). The number of new instructions increased slightly in September 2022, to an average of 12 per branch, having remained at an average of 10 between March-June 2022.
In terms of pricing, 52% of property sales in September 2022 were sold below the asking price. Back in March, the corresponding figure was just 15%, highlighting that property prices could start to drop as more and more people begin to have lower offers accepted on properties. This is nowhere near pre-pandemic average sales of 78% below the asking price, but does imply the pressure may be lifting on the housing market.
By contrast, around 15% of properties sold in September 2022 went for more than the asking price. Back in March, this figure was just under 40%.
In 1980, the average UK property would set you back under £20,000. By 1990, this had almost tripled to £58,000.
Mortgage statistics show that as of August 2022, UK house prices averaged £295,903, almost 15 times their value in 1980. This was a rise of 0.9% on the previous month (around £36,000), and 13.6% on August 2021.
Between 2016 and 2022, UK house prices between property types have followed a similar trend—slow and steady growth up until June 2021, which saw a short spike and fall, before continuing on a gradual increase.
Over these six years, average UK house prices rose by around 23% for all property types. As of July 2022, the average price of a detached house in the UK was £457,552 (26% more than in 2016), and £283,077 for a semi-detached property (a 25% increase on 2016).
UK flats and maisonettes were marginally cheaper than terraced housing in July 2022, with average prices of £234,000 and £239,906, respectively. This is a rise of 25% for the average terraced house in the UK, and 13% for the average flat/maisonette, over the previous six years.
Between January 2018 and May 2022, the monthly sales volume for UK properties gradually rose and fell, reaching a low of 28,000 in April 2020. Around 52,500 properties were sold in May 2022, rising to an all-time peak in June 2021, when property sales reached an excess of 165,000.
During this time, the House Price Index (HPI) of UK properties steadily grew, from almost 118 in January 2018 to more than 153 in May 2022.
The 2022 RICS Residential Survey results are indicative of continued easing in the UK property sales market. Higher interest rates and a weakening economy are certainly contributing factors, along with low levels of supply, which have helped to drive up prices in many areas of the UK. Focusing on new-buyer enquiries, the headline net balance figure stood at -25% in July 2022 – the third successive month with a negative figure, indicating a fall in demand. Agreed sales were also down at -13%. Short-term sale expectations posted a net balance of -20%, and for the 12-month scale, -36% (the most downbeat figure since March 2020).
In regards to new instructions, July 2022 reported figures of -5% – a reflection of the largely stagnant trend in fresh listings coming onto the market. Average stock levels for July 2022 also stood at 36 per branch, and remain close to an all-time low.
This lack of supply is a pivotal factor in the continued growth in house prices. Respondents of the RICS Residential Survey indicated a net balance of +63% on house prices during July 2022 alone. Despite being +78% in April, this is far beyond the long-term average of +13% for this indicator.
Going forward, the 12-month expectations for UK house prices are currently +30%, as of July 2022.
|Period||All property types (Percentage change, monthly)||Detached houses (Percentage change, monthly)||Semi-detached houses (Percentage change, monthly)||Terraced houses (Percentage change, monthly)||Flats and maisonettes (Percentage change, monthly)|
The monthly percentage change across all UK properties has generally fluctuated above and below 1% throughout 2022. This reached a high of almost 2% in July, and a low of approximately 0.4% in February.
Detached houses saw the biggest percentage change in all properties (2.3% in July 2022), followed by 2.14% for semi-detached, and 1.94% for terraced properties in the same month. Uncharacteristically, the percentage change for flats and maisonettes dropped to -0.81% in March 2022—the only negative monthly growth within the last year.
Since January 2006, average UK house prices have fluctuated somewhat in terms of their 12-month percentage change. Generally, this has been a positive change, reflecting a rise in house prices, year-on-year (YoY). However, between June 2008 and October 2009, there was a period of negative growth, reaching as low as -15.6% in February 2009. After this point, there was a rapid increase, up to +9.1% in April 2010.
After a relatively brief, but low, spell of negative growth between January 2011 and April 2012, the 12-month percentage change in UK house prices rose and fell, reaching a high of +9.4% in October 2014, and down to a low of +0.7% in April 2020.
Since the Covid-19 pandemic, the annual percentage change in UK house prices has risen sharply, with some significant fluctuations – the most extreme being between +6.9% and +16% between July 2021 and July 2022, respectively.
|Period||Detached houses (Percentage change, yearly)||Semi-detached houses (Percentage change, yearly)||Terraced houses (Percentage change, yearly)||Flats and maisonettes (Percentage change, yearly)|
In terms of yearly percentage change by property type, detached houses saw the largest climb, by almost +17.3% in July 2022. This is followed closely by +16.8% for semi-detached, and +16.5% for terraced properties. Detached housing has seen sustained, double-digit annual growth in its prices over 2022, with the exception of June 2022 (dropping to +9.7%).
Flats and maisonettes experienced the smallest 12-month growth over the year, dropping to as low as +3.66% in March, and rising up to almost +9.3% in July 2022.
In the year up to August 2022, house prices in Wales increased by 14.6% – the most across all four nations of the UK. This was followed by +14.3% in England and +9.7% in Scotland. The average house price in Northern Ireland rose by 9.6% throughout Q2 2022 and remains the cheapest country in the UK to purchase a house (£169,000).
As of August 2022, the most expensive house prices could be found in England, averaging at almost £316,000, followed by Wales at £220,000 – almost £100,000 cheaper than England for the average property. Average house prices in Scotland stood at a little more than £195,000.
Over time, England has generally remained the most expensive country in the UK to buy a house. The exception to this was between January 2007 to April 2008, when house prices in Northern Ireland exceeded those of England – in some cases by as much as £30,000.
In January 2005, the average Scottish house would set you back almost £94,000, making it the cheapest part of the UK to make a property purchase at the time. Fast-forward to August 2022, and house prices here rose by 52% over a 17-year period—the most for all four UK nations.
By contrast, English properties increased by almost 50% in the same time period, with 44% for Welsh housing, and 34% for those in Northern Ireland.
|Region||12-month percentage change in house prices (%)|
|Yorkshire and The Humber||13.9|
(Source: HM Land Registry and ONS)
The South West region of England experienced the highest annual house price growth over the last 12 months, with average prices increasing by 17% in the year to August 2022. This was a reduction in the growth rate of more than 21% in July 2022.
The East Midlands follows closely behind with a 12-month percentage change of 16.9% in house prices, proceeded by the North West (15.3%). The lowest annual growth rate for August 2022 was in London, where property prices were 8.3% more expensive compared to August 2021. This was down from 10.1% —the corresponding 12-month growth rate for July 2022.
This is followed by the West Midlands and Yorkshire and the Humber, which both saw a 13.9% rise in house prices between August 2021 and August 2022.
Despite having the lowest annual house price growth across all UK regions, London remains the most expensive for property purchases. The average house costs almost £553,000 in August 2022.
Back in 2005, a property in the capital would have set you back around £232,000 – slightly more than the average property now in the North West. However, since then, the average London property has increased by 58% – more than any other region of the UK.
House prices in the South East and East of England have also more than doubled since 2005, with the South West additionally seeing a significant increase (48%) in average property prices over the last 17 years.
By contrast, the North East experienced the smallest rise in average house prices between 2005 and 2022, increasing by almost a third (32%). In 2005, a house in this region would set you back almost £111,500 – around half the cost of the average London property at the time.
Jump to August 2022, and the North East remains the most affordable region of England to buy a house (around £164,000). This is almost £50,000 cheaper than Yorkshire and the Humber – the next most affordable area. However, by this point in time, London property prices are more than three times greater than in the North East.
Whether you're looking for the latest facts and figures on mortgages in 2022 or inspiration on your next move, our experts have put together these studies for you.
The required minimum deposit for buy-to-let mortgages is usually 25% of the property’s value, although this can vary between 20-40% depending on the lender.
Roughly 20% of all homes in the UK are part of the private rental sector (PRS). This equates to around 4.5 million households.
In 2018, there were an estimated 13 million people living across five million UK rented households. Today, with approximately 4.5 million houses in the UK private rented sector, this would put the number of renters in the UK at about 11.5 million.
As of Q1 2022, a typical UK landlord was generating an average of £635 per month (approximately £61,000 per year in terms of gross annual rental income).
Most UK landlords are white (88%) men (55%), aged between 55-64 (31%). They also tend to be individuals (94%), rather than part of a company (5%).
According to the number of people who declare income from a property on their Self-Assessment tax returns, there are around 2.74 million landlords in the UK.
As of Q1 2022, the national average UK landlord had eight properties on their portfolio. However, when surveyed by Paragon Bank, 43% of member landlords were found to only have one property, 39% had 2-4, and 11% had 5-9.
94% of UK rental properties are managed through individual landlords. As there are approximately 4.5 million UK households in the private rental sector, this would mean around 4.23 million properties in the UK are owned by landlords.
Consumer buy-to-let mortgages were introduced in 2016 and are regulated in the same way as residential mortgages. This means borrowers are more protected than with a standard, business buy-to-let mortgage (i.e. those intended for landlords to buy a property and rent it out to tenants).
A buy-to-let mortgage is used to purchase a property with the intention of letting it out, whereas a let-to-buy mortgage is used to rent out an existing property. The latter is angled towards ‘accidental landlords’ (i.e. those who buy a property and decide later they want to rent it out). As a result, let-to-buy can be arranged while the owner is still living in the property.
As with any investment, there are always risks involved. With rising property prices alongside rising taxes and interest rates, property investment appears to be riskier in 2022 than ever before. However, it’s still a good opportunity to earn income and generate capital growth as the property value increases. For those with a more optimistic outlook, it could be perceived as short-term pain for long-term gain.
Most buy-to-let mortgages are not regulated by the Financial Conduct Authority (FCA) because they are perceived as a business transaction. Therefore, they do not meet the FCA’s consumer regulation guidelines, which are in place to protect the general public.
In most circumstances, if you wish to rent out a property and require a mortgage for it, you will need a buy-to-let mortgage. The terms of your existing mortgage may not allow you to rent out your home unless you obtain a consent-to-let agreement. Renting out your property, or even part of your property, without the permission of your lender could be classified as mortgage fraud.
Sources for ‘buy-to-let mortgage approvals’
Sources for ‘best buy-to-let areas for renting to university students’