BTL landlords see debt levels soar

Amidst the recent economic turmoil, the average amount owed via buy to let mortgage loans has surged by 19% in the past year, one firm reveals.

Lenders Octane Capital says that BTL landlords in England and Wales have seen debt levels grow from £467,548 per landlord in the first quarter of 2022 to £558,423 in the first quarter of this year.

This dramatic growth has been driven by an increased reliance on borrowing, as the average number of BTL loans held per landlord also rose by 12%, soaring from an average of six over the same period.

Octane says it has analysed key metrics, including the average number of properties owned per buy to let landlord, the average number of BTL mortgages held to calculate the average BTL mortgage debt for each landlord.

‘Significant impact on buy to let landlords’

The firm’s chief executive, Jonathan Samuels, said: “The high cost of borrowing is clearly having a significant impact on buy to let landlords.

“The number of loans held has increased across the majority of the country, as has the total amount owed as a result of these loans.”

He added: “While it’s clear that a lot of landlords are willing to saddle more debt in order to keep their operation moving, it’s inevitable that a significant number will either downscale their ambitions or jump ship entirely.

“For those who are willing to stick it out and reap the benefits in the long run, there is a real opportunity being presented by the properties either offloaded or overlooked by others.

“While now might not seem like the best time to increase the size of your portfolio, being bold when others are meek can bring reap rewards in the long-term – especially now that mortgage rates have shown signs of easing.”

Largest increase in the number of loans held

The research highlights that the West Midlands stands out with the largest increase in the number of loans held, experiencing a remarkable 49% surge in the past year.

This rise has translated into a 33% increase in the total amount owed through BTL loans, marking the fourth highest increase across all regions.

Following closely behind, both the South East and East of England have witnessed a substantial increase in the average number of BTL loans held per landlord, with increases of 49% and 29%, respectively.

Consequently, both regions have also experienced significant spikes in the total amount owed via these loans.

The South East, in particular, recorded a staggering 95% annual increase, while the East of England saw a substantial 90% growth.

The total amount owed through BTL mortgages

London and the South West have also experienced considerable rises in the total amount owed through BTL mortgages with increases of 78% and 26%, respectively.

Conversely, the North East, Yorkshire and the Humber, and the East Midlands have seen more modest increases of 3%, 2% and 2%.

In contrast, the North West and Wales have bucked the trend with reductions in the total sum owed, experiencing declines of 22% and 37%.

Both regions have also witnessed a decrease of 16% and 3% in the average number of loans held per landlord.

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