Landlord BTL mortgage arrears historically lower than homeowners’

Buy to let mortgages have recorded lower arrears rates than owner-occupier loans in every year but one since records began.

The fact is revealed in Paragon’s 30 Years of Buy-to-Let report, published to mark three decades since the buy to let mortgage product’s were launch.

During that time, the buy to let market has weathered the global financial crisis, a pandemic, tax reforms and periods of higher inflation and interest rates.

Landlords adapt their portfolios

Louisa Sedgwick, the lender’s managing director of mortgages, said: “Paragon’s analysis shows just how much the market has evolved over the past three decades.

“Landlords have adapted to changing economic conditions, taxation and regulation, becoming increasingly strategic in the way they manage their portfolios and approach long-term investment.”

She added: “Many landlords now operate their portfolios as businesses, taking a long-term view of investment and responding to changing tenant expectations, housing standards and regulation.

“The result is a market that is more professional and commercially focused than when buy-to-let first emerged.”

Remortgaging dominates landlord lending

The buy to let mortgage market now comprises 1.92 million outstanding loans worth £311.6bn, accounting for around a fifth of total mortgage balances.

Remortgaging makes up most of the lending activity, which Paragon attributes to experienced landlords managing established portfolios.

Annual lending reached £40.3bn in 2025.

Over the three decades, England’s private rented sector has grown from fewer than two million households to almost five million, with BTL finance helping to fund that expansion.

Improving private rented homes

The report also highlights a fall in the proportion of non-decent privately rented homes, which has more than halved over the past two decades.

Energy efficiency has improved as landlords have invested in upgrading their properties, the bank says.

Buy to let mortgages emerged from collaboration between the Association of Residential Letting Agents, now Propertymark, and a small group of lenders wanting to improve landlords’ access to finance.

Its public launch took place at London’s RAC Club in September 1996, with the first products under the buy to let banner available the following month.