Buy to let possessions up, but demand for mortgages rises sharply

Buy-to-let loans: In Q4 2024, 52,648 new buy-to-let loans were issued in the UK, valued at £9.6 billion—an increase of 39.2% by number and 47.2% by value compared to Q4 2023.

Rental yield: The average gross buy-to-let rental yield rose to 7%, up from 6.74% a year earlier.

Interest rates: Average interest rates on buy-to-let loans decreased to 5.09%, 0.13 basis points lower than Q3 2024, and 0.61 basis points lower than Q4 2023.

Interest cover ratio (ICR): The average ICR increased to 201%, up from 190% in Q1 2024 and 21 basis points higher than Q4 2023.

Fixed vs. variable mortgages: Fixed-rate mortgages reached 1.43 million (up 4.4% year-on-year), while variable-rate loans fell by 15.9% to 518,000.

Arrears: Buy-to-let mortgages in arrears over 2.5% fell to 12,610—down 7% from Q4 2023.

Possessions: There were 700 mortgage possessions in Q4 2024, unchanged from Q3, but up 29.6% year-on-year.