Paragon marked an odd little anniversary this month. It’s 30 years since buy to let mortgages were properly launched in the UK back in 1996. I remember it well.
And to mark it, the bank have pulled together 3 decades of lending criteria for us to chew over and analyse. And I have to admit the numbers are actually quite interesting because they tell a rather different story to the one you’d get from reading the news.
So here’s the headlines. In 2000, there were 120,300 buy-to-let mortgages outstanding in this country worth a combined total of 9.1 billion pounds. But by 2025, that had grown to 1.92 million mortgages worth 311.6 billion pounds.
And gross lending between 2002 and 2025 added up to 753 billion with 40.3 billion of that written in 2025 alone. That’s around about 1/5 of everything currently out on mortgage in the UK. And all of that finance has helped grow the private rented sector from under 2 million households to very nearly 5 million, close to one in five homes in England.
Here’s a figure I really want to draw your attention to though. Buy-to-let arrears have been lower than owner-occupier arrears in every single year since records began bar one. So that’s 30 years with just one exception. And I think that number says more than most of what gets written about investors these days.
Every few months there’s another piece of legislation, another tax tweak, another database to register for. And the running commentary is that investors are somehow reckless or a drain on the system, or just one bad decision away from losing everything or even breaking the system, whatever that means. But the lending data really doesn’t back that up.
It shows a group of borrowers who, on the whole, keep their mortgages paid more reliably than people who are actually buying their own home to live in. And lenders know this better than anyone, because it’s their money on the line that’s been lent out, obviously. It’s part of why, whatever the political noise around the Renters Rights Act or the new landlord database, you don’t have to look very far this autumn to find lenders cutting rates, launching new products and expanding who they’ll lend to.
That’s not sentiment. It’s underwriters looking at 30 years of repayment history and concluding that buy-to-let is a fundamentally sound book of business to be in.
It’s also worth remembering how far the product range has come in 30 years to get to that 311.6 billion pound figure. The earliest buy-to-let deals were fairly blunt instruments. There was a handful of lenders, limited choice on term and structure, and nothing like the flexibility available now around limited companies, HMOs, multi-unit blocks or portfolio lending.
The market growing this large and this steadily is itself part of the evidence for lenders. A product that had regularly blown up in borrowers’ faces over 3 decades wouldn’t have attracted this much competition or this much capital.
What I take from all of this practically is not just that buy to let is probably here to stay, but it’s also worth occasionally checking whether your own borrowing assumptions are out of date. If you last spoke to a lender or a broker two or three years ago and were told that your options were limited at a certain loan to value or with a certain portfolio size, that conversation is worth having again.
Risk appetite across the sector has been widening steadily, not shrinking, however loud the political conversation around investors has become. And the gap between what you assume you can borrow and what’s actually available can be bigger than you’d think.
That’s most relevant for anyone who has turned down or quoted a poor rate a few years back and simply gave up looking. A limited company structure that wasn’t well catered for in 2022 might be mainstream now. A portfolio size that pushed you into a specialist niche lender before might sit comfortably with a buy to let lenders criteria today. And that’s precisely the kind of check a good mortgage broker will do without even being asked, comparing what’s actually on offer now against what you were told last time you looked.
And if you don’t have a mortgage broker, or if you’d like to have a second opinion, I’ll be very happy to put you in touch with my very good mortgage broker.
Just email me: thepropertyteacher@gmail.com and I’ll happily make the introduction.
Here’s to successful property investing.
Peter Jones
Author, property investor & ex-Chartered Surveyor
P.S. If you’d like a deeper dive into property investing based on the real-life experience of an investor who has built a substantial multi-property portfolio, my popular e-book, The Successful Property Investor’s Strategy Workshop, explains how I built my own portfolio from scratch and the principles that can help you do the same.
You can find out more here: https://thepropertyteacher.co.uk/the-successful-property-investors-strategy-workshop/
