The era of the “hobby landlord” is fast disappearing, as new figures highlight a dramatic fall in buy-to-let mortgage approvals.

UK Finance data shows approvals dropped from 25,280 in Q4 2022 to just 12,422 in Q1 2024—a 53% decline in barely a year.

End of the Hobbyist Investor

Jamie Williams, specialist property expert at Pure Property Finance, says the numbers confirm what many in the sector have suspected:  “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.”

Research by Alto backs this up, with 93% of agents concerned about losing their independent landlord clients altogether, and one in three reporting a surge in landlords selling up.

Professionals Take the Reins

Williams stresses this is less a crisis and more an evolution. As smaller, casual landlords retreat, seasoned investors are stepping in.  “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.”

Demand for finance from professional landlords is rising, particularly those already holding several properties. However, Williams cautions that this shift comes with consequences for the wider industry.

Impact on Letting Agents

While professional landlords may bring stability to tenants and the sector, their approach is markedly different from part-time landlords. Many prefer to manage portfolios in-house, leaving traditional letting agents worried about shrinking client lists.

By the Numbers: Casual Landlords Exit

• 53% – fall in new BTL mortgage approvals in just over a year

• 25,280 → 12,422 – approvals Q4 2022 vs Q1 2024 (UK Finance)

• 93% – agents concerned about losing independent landlord clients (Alto)

• 1 in 3 – agents report a surge in landlords selling up