Buy-to-let has marked its 30th anniversary with the private rented sector now providing homes to almost five million households in England.
The mortgage product was publicly launched in September 1996 following collaboration between the Association of Residential Letting Agents (ARLA), now Propertymark, and a small group of lenders including Paragon.
At the time, England’s private rented sector contained fewer than two million households and landlords had limited access to mortgage finance specifically designed around residential letting.
Three decades later there are 1.92 million outstanding buy-to-let mortgages worth £311.6bn, with £40.3bn of lending completed during 2025, according to Paragon’s 30 Years of Buy-to-Let report.
RENTAL MARKET GROWTH
Buy-to-let lending has developed alongside a major expansion of the PRS, which now accounts for almost one in five households in England.
John Heron, former Paragon Executive Director and one of the figures involved in the creation of buy-to-let, says: “Demand for rented homes was growing, but landlords lacked access to finance designed around residential lettings.
“Buy-to-let was created to solve that problem and bridge that gap, encouraging investment into the private rented sector and helping to increase housing supply at a time when it was badly needed.”
The market has subsequently navigated the global financial crisis, changes to landlord taxation and regulation, the pandemic and the recent period of higher borrowing costs.
Paragon says landlords have responded by becoming increasingly focused on portfolio management, ownership structures and longer-term business planning.
PROFESSIONAL LANDLORDS
Louisa Sedgwick (main picture), Managing Director of Mortgages at Paragon Bank, says: “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.”
Paragon’s analysis also finds that the proportion of non-decent homes in the PRS has more than halved over the past two decades, while energy efficiency has improved.
AGENT ROLE
Nathan Emerson, Chief Executive of Propertymark, says letting agents played an important role in the creation of the market.
He says: “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.
“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.”
Paragon says remortgaging now accounts for the majority of buy-to-let lending, reflecting a market increasingly dominated by experienced landlords managing established portfolios.
