Landlords have seen the amount they owe in buy-to-let mortgage loans increase by 19% in the last year.

Property lenders Octane Capital analysed the average number of properties owned by each buy-to-let landlord, and the amount of each landlord’s mortgage debt.

The data shows that the amount owed via buy-to-let mortgages has increased from £467,548 per landlord in Q1 2022 up to £558,423 in Q1 this year. This follows a warning from the Bank of England two months ago that landlords – and their tenants – faced a ‘big squeeze’ by rising rates.

Increases

Average buy-to-let loans held per landlord have also increased by 12%, up from an average of six to 6.7.

The West Midlands has seen the largest increase in the number of loans held, rising by 49% in the past year.

Both the South East (+49%) and East of England (+29%) follow the West Midlands with a sharp uplift in the average number of buy-to-let loans.

Drastic

As a result, both regions have also seen a drastic increase in the total amount owed via these loans, with the South East seeing a 95% annual increase, while this total has increased by 90% across the East of England.

Just the North West (-22%) and Wales (-37%) have seen a reduction in the total sum owed, with both regions also seeing a reduction in the average number of loans held per landlord at -16% and -3% respectively.

It’s inevitable that a significant number will either downscale … or jump ship entirely.”

Jonathan Samuels, CEO at Octane Capital, says: “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.”

Meanwhile, research by estate agent Benham and Reeves shows that landlords are reducing their stock.

Throughout England and Wales portfolio sizes have fallen 5.6%, from first quarter last year to Q1 2023, dropping from 9.1 properties to 8.6.