Purchase activity across the buy-to-let (BTL) sector has increased to £18bn this year, according to new UK Finance figures.
The banking body stated that the figure reflects a rise of 83% on the total in 2020.
UK Finance estimated that gross lending overall will peak this year at £316bn, a total up 31% on 2020, then moderate to £281bn in 2022, before increasing to £313bn in 2023.
While the 2022 and 2023 gross lending figures will be reductions on the 2021 peak, UK Finance highlighted that they are higher than the 2020 and 2019 figures and represent a return to more stable levels of activity.
“It’s interesting to see that demand for BTL properties continues to thrive and is likely to have seen as much as an 83% increase in activity on 2020,” commented Trussle head of mortgages, Miles Robinson.
“Student rental properties especially remain an attractive proposition for investors, with recent research revealing that student BTLs consistently outpace the rest of the PRS market, by as much as 17.86% in rental yield.
“It is true that BTLs aren’t the bargain that they once were. Changes to tax and the stamp duty surcharge have impacted returns, which made rental the king of investments. However, this new data shows that property is still seen as a safe and reliable way of generating extra income. This can be both in the short-term, through rent collection and long-term gains in house prices.”
The latest figures from UK Finance still suggested that the main driver of lending in 2021 will be for house purchase, at £200bn, a figure up 53% on 2020. According to the data, homeowner remortgaging activity will be slightly down on last year at £62bn.
UK Finance principal, data and research, James Tatch, added: “The outlook for the housing and mortgage markets over the next two years is for a return to more stable, balanced picture following the upheavals of the last two years.
“While risks remain, both to new lending and ongoing affordability, the market looks to be emerging from the pandemic in a better place than previously anticipated, supported by a much improved wider economic outlook.”
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