Mortgage lenders are reporting a significant influx of first-time landlords as mortgage rates decline, competition for residential properties moderates, and property offers a more secure option than jittery stock markets.

24% of business

Foundation Home Loans says that first-time landlords now constitute 24% of their overall business this year, up from 21% in 2024.

Sales director Grant Hendry told Mortgage Solutions: “I think the increase is down to a number of reasons – a feeling that rates have peaked and are falling, house prices are stable and, despite the increases in stamp duty and uncertainty around the Renters Rights Bill and EPC requirements, there is still a real appetite to invest in property.

“It really demonstrates the strength and resilience of the market.”

Many of those new investors are reportedly individuals who would traditionally be first-time homebuyers but are instead opting for investment properties.

Simmy Kaur, director of BTL mortgages at portfolio management application Lendlord confirms the trend, saying: “We’re seeing a lot of first-time landlords looking at property that they want to refurbish, renovate, let out and refinance or opting for an HMO because the yields are much better.”

And Buckinghamshire Building Society has also noted the trend, with a 20% increase in first-time landlord applications since the fourth quarter of last year.

Claire Askham, their head of mortgage sales, attributes this to improved affordability metrics: “Interest rates have fallen to levels not seen for some time, which has had a positive impact on affordability calculations.

The resulting improvement in interest coverage ratios means more applicants are able to meet lender requirements.”

“The resulting improvement in interest coverage ratios means more applicants are able to meet lender requirements, opening up opportunities for first-time landlords who may have previously struggled to qualify.”

The North West region has emerged as the top location for first-time landlords, with 87.6% of buyers using limited company structures and pursuing more complex investment options such as holiday lets and houses in multiple occupation.

Askham says it is not just younger buyers, older buyers are also “Entering the first-time landlord market as a means to supplement their income in preparation for retirement.”

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