United Kingdom Targeting Buy-to-Let Landlords Market Trends Report 2021: BTL Gross Mortgage Lending Falls by 12% in 2020 Under the Impact of COVID-19 – ResearchAndMarkets.com

DUBLIN–(BUSINESS WIRE)–The “Targeting Buy-to-Let Landlords 2021: UK Market Trends Report” report has been added to ResearchAndMarkets.com’s offering.

This report outlines the broad trends and developments amongst buy-to-let (BTL) landlords with regards to their mortgage activities. This report focuses on the latest developments and market drivers of the BTL mortgage market, the market size, and the future of the market in the coming five years.

This Report Targeting Buy-to-Let Landlords 2021 found that gross BLT mortgage lending declined by almost 12% in 2020.

Recent legislative and tax changes have had a negative impact on the BTL market from 2016 onwards and these negative forces were compounded in 2020 by the COVID-19 pandemic.

However, the market is expected to see a recovery in 2021, driven by the ending of the Stamp Duty Holiday in the middle of the year and the recovery in the UK economy as COVID-19 restrictions were eased. Gross BTL mortgage lending is expected to rise by almost 10% in 2021 but will remain below the level seen in 2019.

In contrast with recent years, in 2021 (and to a much lesser degree in 2020), the BTL mortgage market has shifted back towards home purchases rather than remortgaging, with the Stamp Duty Holiday helping this trend.

Rising demand for BTL mortgages in 2021 was also driven by rising demand for rental properties from tenants. Rising tenancy demand has helped push up rental yields to around 6% in the first half of 2021.

Other key findings from the report are:

• Gross lending on BTL mortgages is expected to rise by 12% between 2021 and 2026, with a decline expected in 2022, followed by recovery in the following four years.
• The amounts outstanding on BTL mortgages is expected to rise by around 19% between 2021 and 2026
• There are around 75 major BTL mortgage lenders in the UK, but two players dominate the market, Lloyds Banking Group (e.g., Birmingham Midshires) and Nationwide (e.g. Mortgage Works).
• The typical BTL landlord is not a professional landlord, in the sense of earning the bulk of their income from their BTL activities
• COVID-19 and official responses to it reshaped the BTL and housing markets in many ways. Key changes were:
  • limiting the supply of housing coming onto the market but also boosting housing demand (especially for homes outside of the major cities and for larger homes) leading to rising prices.
  • restricting and banning for a period landlords taking proceedings against tenants in rent arrears, which financially disadvantaged some landlords.
  • made capital gains rather than rental income a major attraction for BTL landlords
  • caused the costs of being an owner occupier to rise faster than the costs of renting a property
  • changed the interactions between BTL landlords and brokers/lenders with more online remote contacts, and improved the relationship between brokers and mortgage lenders, who had to work co-operatively to support the market. It also increased the time for mortgage applications to be assessed.

Key Topics Covered:

1. INTRODUCTION

• Abbreviations

2. EXECUTIVE SUMMARY

• Industry Structure
• COVID-19 re-shapes the market
• Regulatory and tax changes make it harder to operate as a landlord
• COVID-19 dents the market in 2020, but 2021 likely to see a recovery
• Modest growth expected in the near future
• A market dominated by two main players

3. MARKET STRUCTURE

• Five key players
• Not all BTL landlords are alike
• Mortgage Lenders and Brokers

4. MARKET DEVELOPMENTS AND DRIVERS

• COVID-19
• COVID-19 pushes up house prices
• While rental costs continue to rise, renting remains the only option for many
• Do landlords plug the supply gap or do they widen it?
• Landlords face more regulations
• Green BT mortgages hit the market
• Major tax changes have hit landlords
• The tax and regulatory changes have had a negative impact on landlords
• But is the BTL investment tide turning
• Rise of the SPV and Ltd Company
• Most landlords are relatively small scale operators
• BLT investors see increasing choice in 2021

5. THE KEY PLAYERS

• Two dominant players
• The second tier players

6. MARKET SIZE AND TRENDS

• Introduction
• COVID-19 hits the BTL market
• But the market will need new blood
• Remortgaging dominates but 2021 sees a revival in home purchases
• Almost £300 billion owed on BTL mortgages

7. THE FUTURE

• Many uncertainties regarding the future
• Forecast assumptions
• The Forecast
• Greater competition from build to rent
• New ways of working look set to stay

8. ASSOCIATIONS

• Aldermore Bank
• Bank of Ireland
• Barclays
• Coventry BS
• Cynergy Bank Limited
• Fleet Mortgages
• Foundation Home Loans
• HSBC Bank
• Leeds BS
• Lloyds Banking Group
• Metro Bank
• NatWest Group
• Nationwide BS
• OneSavings Bank Plc
• Paragon Banking Group
• Santander UK
• Shawbrook Bank
• Skipton BS
• TSB Bank
• Topaz Finance Ltd
• Virgin Money Plc
• Yorkshire BS

For more information about this report visit https://www.researchandmarkets.com/r/4i6tzh

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