Buy to let mortgages have grown into a £311.6bn market, 30 years after their public launch at London’s RAC Club.
The first products bearing the name followed in October 1996, giving landlords access to finance designed around residential lettings. Paragon’s anniversary 30 Years of Buy to Let report, puts the number of outstanding loans at 1.92 million.
The lender says this finance has helped the private rented sector in England grow from under two million households to nearly five million.
Landlords adapt their portfolios
The bank’s managing director of mortgages, Louisa Sedgwick, said: “Paragon’s analysis shows just how much the market has evolved over the past three decades.
“Landlords have adapted to changing economic conditions, taxation and regulation, becoming increasingly strategic in the way they manage their portfolios and approach long-term investment.”
She added: “Many landlords now operate their portfolios as businesses, taking a long-term view of investment and responding to changing tenant expectations, housing standards and regulation.
“The result is a market that is more professional and commercially focused than when buy to let first emerged.”
Remortgaging dominates landlord lending
Remortgaging accounts for most of buy to let lending, with experienced landlords managing established portfolios accounting for a growing share of activity.
Annual lending for the sector reached £40.3bn in 2025.
Buy to let mortgages emerged when the Association of Residential Letting Agents, now known as Propertymark, and several lenders, including Paragon, collaborated.
At the time, rented home demand was rising, but landlords had limited access to suitable finance.
Agents and lenders collaborated
Propertymark’s chief executive, Nathan Emerson, said: “The creation of buy to let showed what can be achieved when different parts of the housing industry work together.
“Letting agents were seeing first-hand the growing demand for rented homes and the challenges landlords faced accessing finance that reflected the realities of residential letting.”
He added: “Working alongside lenders including Paragon, ARLA helped develop a framework that encouraged investment into the private rented sector and increased the supply of homes available to rent.
“Thirty years on, that spirit of collaboration remains just as important.”
Paragon’s chief executive, Nigel Terrington, said: “We were involved at the inception of the market and have supported landlords through every stage of its development over the past three decades.
“The needs of landlords today are very different from those of the mid-1990s.”
He continued: “As the market has evolved, we’ve evolved with it, continuing to invest in specialist expertise, develop our lending and adapt our support to meet the changing needs of landlords and brokers.”
Mortgage arrears stay lower
Paragon’s analysis reveals the proportion of BTL mortgages in arrears has been below that of owner-occupier loans in every year but one since records began.
Over those three decades, the market has weathered the global financial crisis, tighter regulation, a pandemic, tax reforms and periods of higher inflation and interest rates.
The report also highlights changes to housing conditions, with the number of non-decent homes in the private rented sector more than halving over the past 20 years.
Energy efficiency has improved too, which Paragon attributes to landlords investing in upgrades to their properties.
BTL helped landlords invest
Simon Thompson, the managing director of Accommodation for Students, said: “There’s no doubt that buy to let funding has given landlords more scope to buy suitable properties and build a lasting income.
“What began as a way to fund individual purchases now supports businesses with more complex financial needs.”
He added: “Landlords can use refinancing as an opportunity to review their arrangements as circumstances change.
“The next phase of buy to let could bring greater demand for flexible products that help fund improvements and support longer-term planning.”
