Our 2024 review

Each year brings its share of challenges for the buy-to-let sector, and 2024 was no exception. With a general election, a tough Budget, and ongoing discussions around rental reform, landlords and brokers faced uncertainty. Yet, despite these hurdles, the buy-to-let market showcased remarkable resilience, empowering ambitious landlords to realise property investment opportunities and meet the growing demand for rental housing.

Lender innovation driving the market forward

Throughout 2024, buy-to-let lenders, including Landbay, developed new solutions to support landlords and brokers. The year saw significant activity across the market, including competitive rate reductions, innovative product launches, and flexible lending criteria. Lenders adapted to landlords’ evolving needs, tackling affordability concerns and higher operational costs through variable fee structures, zero-fee products, higher LTVs, and bespoke options for various borrower profiles.

High-yield property types like Houses in Multiple Occupation (HMOs) and Multi-Unit Freehold Blocks (MUFBs) became a particular focus, mainly as first-time landlords explored these avenues to enter the market.

Traditionally seen as complex, these properties are now more accessible with tailored products. At Landbay, we’re proud to help new landlords enter this space, recognising the demand and potential for substantial returns.

Innovation through technology

The use of Automated Valuation Models (AVMs) has been a game-changer in 2024, streamlining the buy-to-let process. AVMs have delivered faster decisions, reduced costs, and improved efficiency, ensuring landlords can secure deals quickly. We became the first mainstream BTL lender to integrate AVM products early in the year and expanded our offering in August with two- and five-year AVM mortgages at 75% LTV, including options for non-portfolio landlords.

On average, AVMs are three times faster than traditional applications, with some cases progressing from a decision in principle to an offer within just 24 hours. By removing valuation fees, AVMs also help landlords save significantly—one of our clients saved £4,000 across their portfolio.

The budget impact

The Spring Budget caused a stir, particularly the unexpected 2% stamp duty increase on second homes. While landlords welcomed the decision to maintain capital gains tax, the sudden introduction of higher stamp duty created challenges. For smaller landlords, this may have caused hesitation in scaling their portfolios. However, many landlords with long-term ambitions saw opportunities to negotiate on purchase prices, offsetting the impact of the changes.

Despite initial volatility in swap rates and a rise in buy-to-let rates following the Budget, we bucked the trend, reducing rates across our fixed-rate products, including our AVM and non-portfolio landlord ranges. With swap rates stabilising and further anticipated changes to the Bank of England base rate, we expect more lenders to reprice their products, paving the way for a positive start to 2025.

Outlook: resilience and opportunity

While 2024 posed challenges, the fundamentals of the buy-to-let market remain strong. Landlords continue to see valuable investment opportunities, rental demand remains high, and lenders like us are innovating to support brokers and their clients.

As we head into 2025, the resilience of the buy-to-let market is undeniable. With strong tenant demand, lender innovation, and opportunities for landlords across the UK, we expect the sector not only to endure but to thrive.

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