11 big facts about the £1.3 trillion buy-to-let boom

Buy-to-let is making a ton of money right now

If you’re renting in London and trying to buy your own place but being gazumped by cash buyers, it will come as no surprise to you that buy-to-let is booming.

Here are 11 facts about the market:

  1. Buy-to-let lending represents 15% of total mortgage lending – nearly £1.3 trillion.
  2. In 2005, that figure was 7.7%.
  3. Most mortgage lenders need to see rent income at least 125% of mortgage payments to approve a buy-to-let mortgage.
  4. Over the past 18 years, buy-to-let has made an average profit of nearly 1,400% per investor, compared with 210% in returns from equities or 230% from gilts.
  5. In 2001, just 2.3 million households were in rented accommodation, compared with 5.4 million today.
  6. In 10 years, this will rise to 7.2 million, according to PwC.
  7. Part-time landlords make up more than 70% of the private renting sector.
  8. By 2025, more than half of people under 40 will be living in properties owned by private landlords.
  9. Average buy-to-let yields are currently 4.1% in London.
  10. 95% of landlords own fewer than five properties.
  11. However, the 3% of landlords who own more than five properties account for almost a quarter (22%) of privately rented homes.

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Readers' comments (1)

  • When did a 4.1% yield become a ton of money?

    Landlords have the risk of tenants not paying their rent or wrecking the place on exit. Or the amount of paperwork involved, having to act as unpaid immigration officers etc.

    The detractors also need to ask the question, where would the renters now be if it wasn't for ' Buy to let' investments?
    Its all investment in the housing market that has had to copy with increasing demand from increasing birth rate and unacceptable levels of immigration.



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