Latest mortgage approvals figures reveal the rapid rate at which ‘casual landlords’ are disappearing from the rental sector, according to Jamie Williams (pictured), specialist property expert at Pure Property Finance.

Williams points to UK Finance data, which shows new BTL mortgage approvals have plummeted from 25,280 in Q4 2022 to just 12,422 in Q1 2024 – a 53% drop in just over a year.

End of an era

Williams says: “With interest rates still being high and tax rates going up, there’s no question that the golden age of buy-to-let is over for the hobbyist investor.”

The collapse follows stark warnings from the rental sector and research by Alto, which shows 93% of agents are concerned about losing their independent landlord clients altogether and one in three reporting a surge in landlords selling up.

What we’re seeing are serious and very experienced landlords step in to build smart and sustainable portfolios.”

Williams says professional landlords are moving in to replace the amateurs and that his firm is seeing an increase in demand for finance from landlords that already have several properties, but adds that they operate very differently.

“What we’re seeing are serious and very experienced landlords step in to build smart and sustainable portfolios.

These often have a longer-term outlook, better tenant management and a greater understanding of risk compared to your average Joe that wants to just rent out his old flat.”

Although Williams believes the shift is more of an evolution than a crisis, it is not good news for traditional letting agents, as professional investors typically manage their portfolios in-house.