BTL lending falls 55%, UK Finance figures show

The total value of new buy-to-let (BTL) lending reached £6.3bn in the fourth quarter of 2023, a fall of 55.4% on Q4 2022.

According to new figures published by UK Finance, the average gross BTL rental yield for the UK in Q4 2023 was 6.74%, compared with 5.85% in the same quarter a year earlier.

UK Finance reported the figures in its latest quarterly insight into BTL lending, which also highlights the lending trends of borrowers accessing the market.

The banking trade body reported that average interest rate across all new BTL loans in the UK increased to 5.7% in Q4 2023, up from 3.67% a year previously. As a result, the average BTL interest cover ratio (ICR) for the UK fell to 180%, compared with 238% in Q4 2022.

Elsewhere, UK Finance revealed that the number of BTL fixed rate mortgages outstanding in Q4 2023 totalled 1.37 million, 1.7% up on a year previously. By contrast, the number of variable rate loans outstanding fell by 12.7%, to a total of 620,000.

By the end of Q4 202,3 there were also 13,570 BTL mortgages in arrears that were greater than 2.5% of the outstanding balance. This figure was 123.9% higher than in the same quarter a year previously.

Furthermore, the UK Finance figures revealed there were 500 BTL mortgage possessions taken in Q4 2023, a figure up by 56.3% year-on-year.



Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.