Buy-to-let loans fell after Budget, specialist bank reports
Paragon says its buy-to-let mortgage book dropped 4.7% before and after Rachel Reeves delivered her Budget.
Loans to buy-to-let property owners fell after the Budget in November, a specialist bank reveals.
Paragon Bank says its new mortgage lending dropped 4.7% from £810million to £774million in the six months to the end of March.
And the lender predicts its mortgage total would be towards the lower end of the £1.5billion to £1.7billion range, The Times reports.
There was a lot of hesitancy among property investors before Rachel Reeves (pictured) delivered her Budget, which introduced a Mansion Tax on properties worth more than £2million and raised income tax rates for landlords.
Analysts at Peel Hunt were reported as saying: “Its [Paragon] lending in the core buy-to-let market remains supported by the ongoing shift in the market towards professional landlords, offering greater client longevity through higher retention, and continued levels of low-risk in lending terms.”
Lending grows
Earlier this year, brokerage Alexander Hall said overall buy-to-let mortgage borrowing continued to grow.
The company’s market analysis, based on Bank of England data, showed buy-to-let lending had grown at an average quarterly rate of 7% during the past year.
During the last three months of 2025(Q3, £6.6billion was lent to the buy-to-let sector. While buy-to-let mortgages remained the smallest segment of the mortgage market, accounting for 8.2% of total lending, the figure represented a 22% increase on the previous quarter and a 26% rise compared with the three months from July to September in 2024.
Meanwhile, UK Finance figures from the same period showed the value of new buy-to-let lending had risen by 28% year-on-year, while the number of new buy-to-let loans issued increased by 23%.
