Most renters do not live in buy-to-let properties

Most renters live in homes with a buy-to-let mortgage

At PMQs on 5 July, Angela Rayner MP, deputy leader of the Labour Party, claimed that most people living in rented accommodation were in homes that had been purchased through a buy-to-let mortgage. 

The same claim was subsequently tweeted by Labour’s shadow chancellor, Rachel Reeves. 

This claim is technically incorrect, as it holds true only for the private rented sector, not for overall rentals. The buy-to-let sector is also in decline, according to property experts, though this is being offset by an increase in the number of properties built specifically to rent in the private sector. 

All MPs, including shadow ministers, should correct false or misleading claims as soon as possible in their capacity as public representatives. 

Last month the Procedure Committee made recommendations regarding the corrections system in Parliament. It suggested that the corrections process, which allows ministers to correct the official record, should be extended to all MPs. Full Fact supports this recommendation, which if implemented would make it possible for an MP to arrange for a correction to be made to the parliamentary record in situations like this, where currently no such procedure exists.

Landlord survey data

The most reliable source of data on whether landlords have a mortgage or not is the English Private Landlord Survey, the most recent edition of which uses data gathered during 2021. 

According to the data from the survey, in 2020/21 the private rented sector in England accounts for just over 4.4 million households and represents around one in five of all households in the country. 

Landlords were asked which, if any, types of loans or borrowing they currently have to help fund their rental property. Over half (57%) were buy-to-let landlords with an existing mortgage, representing 61% of privately rented tenancies. 

More than a third (38%) of landlords had no debt or borrowing while smaller proportions had a commercial loan (3%) or a loan from family or friends (2%).

This means approximately 2.7 million of the 4.4 million privately rented homes are owned through buy-to-let mortgages. 

Social housing

Statistics released by the Regulator of Social Housing dating back to March 2022 show that a further 4.4 million homes are being rented from both private and local authority registered providers. 

This means that, according to the most recently available figures, roughly 8.8 million households live in rented accommodation in total, of which 2.7 (31%) million are owned by buy-to-let landlords. 

Although there have been recent concerns that rising mortgage interest rates could drive many of those landlords with existing buy-to-let mortgages out of the market, Aneisha Beveridge, Head of Research at Hamptons Estate Agents, told Full Fact: “Perhaps surprisingly, we haven’t seen any evidence that more landlords have sold up this year. However, fewer landlords are purchasing buy-to-lets which is one of the reasons why the sector has been and is likely to shrink again in 2023.

“We estimate that by the end of this year, landlords are likely to have sold 303,840 more buy-to-lets than they bought since 2016 which was when a raft of tax and regulatory changes were introduced. That said, these numbers won’t reflect the rise in the number of institutional investors buying-in through schemes such as Build to Rent which will have helped close some of that supply gap.”

Build-to-rent properties are large developments of flats, built specifically for renting out. Unlike private rented sector buy-to-let properties, they tend to be owned and managed by companies rather than independent landlords.

We have contacted both Angela Rayner and Rachel Reeves about their claims and will update this fact check when we receive a response.