The value of new buy-to-let (BTL) lending fell by 55.4% year-on-year (YOY) to £6.3bn, according to the latest UK Finance figures.
According to UK Finance, the average gross BTL rental yield came to 6.74%, which is up from 5.85% in the same quarter the year before.
The average interest rate for new BTL loans stood at 5.7% in Q4 2023, an increase from 3.67% a year previously.
The BTL interest cover ratio in the period contracted from 238% in Q4 2022 to 180% in Q4 2023.
The number of BTL fixed rate mortgages outstanding in Q4 2023 came to 1.37 million, an increase of 1.7% on a year previously.
The number of variable rate loans outstanding decreased by 12.7% YOY to 0.62 million.
The report added that there were 13,570 BTL mortgages in arrears over 2.5% of the outstanding balance. This is 123.9% higher than in the same quarter previously.
UK Finance said that there were 500 BTL mortgage possessions in Q4 2023, a rise of 56.3% on the same quarter in 2022.
Earlier this year, UK Finance reported that homeowner and BTL mortgage arrears ticked up in Q4 2023.
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