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U.K. Post-2014 Buy-To-Let Monitor Q4 2024

This report does not constitute a rating action.

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Table 1

Buy-to-let (BTL)--Key features
Q4 2024
Number of loans 75,595
Total current balance (mil. £) 16,032
Average original balance (£) 215,802
Average current balance (£) 212,076
90+ delinquencies (% of total current balance) 1.01
WA original loan term (years) 22.1
Five-year fixed term (% of loans originated on or after 2023) 84.4
WA current interest rate - loans currently on a fixed rate (%) 4.4
WA current interest rate - loans currently on a floating rate(%) 9.3
WA interest rate reversion margin (% of total current balance) 4.6
Interest rate reversion margin (% of total current balance)
<2 0.4
2-3 7.3
3-4 9.3
4-5 65.7
5-6 17.3
>6 0.0
WA--Weighted-average. Q--Quarter.

Table 2

Higher current LTV ratio signals relatively worse performance
40-50 50-60 60-70 70-80 80-90
Current 96.9 96.9 97.1 98.3 93.2
1-2 1.4 1.4 1.4 0.7 0.8
2-3 0.7 0.7 0.3 0.2 0.5
3-4 0.2 0.3 0.2 0.2 0.7
4-5 0.1 0.2 0.2 0.1 0.0
5-6 0.2 0.1 0.1 0.1 0.0
>6 0.5 0.5 0.8 0.4 4.9
As of Q4 2024. House price indexation as of Q3 2024. LTV--Loan-to-value.

Table 3

Relative performance worse than owner-occupied, but overall low delinquencies
(%) Q4 2024 total delinquencies
EMEA RMBS index 4.1
U.K. prime 0.9
U.K. BTL post-2014* 2.5
'U.K. BTL post-2014 2.9
U.K. nonconforming post-2014 11.3
*Based on loan-by-loan data as of Q4 2024. Q--Quarter. BTL--Buy-to-let. Source: S&P Global Ratings' European RMBS Index Report Q4 2024

Table 4

Regional delinquency picture broadly the same
Total (%) East Anglia East Midlands London North North West Northern Ireland Scotland South East South West Wales West Midlands Yorks And Humber
Current 97.5 97.1 98.0 97.5 97.7 97.8 96.3 97.3 97.0 97.9 97.4 97.5 97.3
1-2 1.1 1.3 0.8 1.1 1.1 1.3 1.7 0.9 1.1 0.9 1.4 1.3 1.5
2-3 0.4 0.7 0.3 0.4 0.3 0.3 0.0 0.3 0.6 0.1 0.4 0.3 0.3
>3 1.0 1.0 0.9 1.0 0.9 0.6 1.9 1.4 1.3 1.1 0.8 0.9 0.8
As of Q4 2024.

Table 5

Limited delinquency deviation by property type
Detached Flat Multifamily Terraced
Current 97.0 97.3 98.1 97.8
1-2 1.3 1.2 0.8 1.1
2-3 0.4 0.4 0.3 0.4
>3 1.2 1.1 0.8 0.8
As of Q4 2024.

Table 6

London and South East are lowest yielding areas
WA DSCR WA rental yield (%)
East Anglia 2.05 5.9
East Midlands 2.32 7.6
London 1.93 5.7
North 2.42 8.0
North West 2.37 7.7
Northern Ireland 2.08 7.1
Scotland 2.23 10.1
South East 2.01 6.0
South West 2.16 6.5
Wales 2.39 7.8
West Midlands 2.16 6.8
Yorks And Humber 2.30 7.4
As of Q4 2024. WA DSCR - Weighted-average debt service coverage ratio;

Rental yield using indexed rental income.

Chart 1

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Chart 2

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Chart 3

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Chart 4

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Chart 5

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Summary Of Methodology

What is included in the monitor?

The monitor includes first-lien buy-to-let loans of U.K. transactions that we rate, originated on or after 2015 and for residential purposes (i.e., excludes commercial and similar properties).

What is the definition of total delinquencies?

Total delinquencies are arrears for one or more calendar months.

Is the monitor loan count- or dollar-weighted?

We calculate the monitor based on the current balance of each loan, unless stated otherwise.

How is indexation done?

We use publicly available data to index original property valuations (U.K. Land Registry House Price Index) as well as rental data (U.K. Office for National Statistics). In both instances we index at a regional level.

How is the weighted-average DSCR calculated?

We divide annualized indexed rental income by the annualized payment due, which is then weighted by the current balance of each loan. We cap individual DSCR at 5.0x to limit the impact of outliers.

How is the weighted-average rental yield calculated?

We divide annualized indexed rental income by the indexed property valuation, which is then weighted by the current balance of each loan.

Appendix

Transactions included in the monitor (loan-by-loan)
Transaction Weight (%)
Chetwood Funding 2024-1 PLC 6.3
Lanebrook Mortgage Transaction 2024-1 PLC 3.3
Hops Hill No.4 PLC 2.8
Twin Bridges 2022-1 PLC 2.7
Shawbrook Mortgage Funding 2022-1 PLC 2.6
Twin Bridges 2022-2 PLC 2.4
Twin Bridges 2021-2 PLC 2.4
Lanebrook Mortgage Transaction 2023-1 PLC 2.3
Hops Hill No.3 PLC 2.1
Twin Bridges 2023-2 PLC 2.0
Atlas Funding 2024-1 PLC 2.0
Mortimer BTL 2023-1 PLC 1.9
Twin Bridges 2021-1 PLC 1.8
Braccan Mortgage Funding 2024-1 PLC 1.8
London Wall Mortgage Capital PLC 2024-1 1.8
Winchester 1 PLC 1.8
Lanebrook Mortgage Transaction 2022-1 PLC 1.7
Molossus BTL 2024-1 PLC 1.7
Tower Bridge Funding 2023-2 PLC 1.7
Canada Square Funding 6 PLC 1.6
Twin Bridges 2022-3 PLC 1.6
Twin Bridges 2023-1 PLC 1.6
Atlas Funding 2022-1 PLC 1.6
Atlas Funding 2023-1 PLC 1.6
Hops Hill No.2 PLC 1.6
Together Asset Backed Securitisation 2024-1ST2 PLC 1.6
Stratton BTL Mortgage Funding 2022-1 PLC 1.5
Together Asset Backed Securitisation 2023-1ST1 PLC 1.5
Lanebrook Mortgage Transaction 2021-1 PLC 1.5
Pierpont BTL 2023-1 PLC 1.4
Together Asset Backed Securitisation 2022-1ST1 PLC 1.4
Mortimer BTL 2022-1 PLC 1.4
Bletchley Park Funding 2024-1 PLC 1.3
Grosvenor Square RMBS 2023-1 PLC 1.3
Together Asset Backed Securitisation 2024-1ST1 PLC 1.3
Together Asset Backed Securitisation 2023-CRE-1 PLC 1.2
Tower Bridge Funding 2024-2 PLC 1.2
Together Asset Backed Securitisation 2023-1ST2 PLC 1.2
Tyne Funding No. 1 PLC 1.2
Mortimer BTL 2021-1 PLC 1.1
Tower Bridge Funding 2024-1 PLC 1.1
London Wall Mortgage Capital PLC 2021-1 1.1
Elstree Funding No.3 PLC 1.1
Mortimer 2024-Mix PLC 1.1
Canada Square Funding 2020-1 PLC 1.1
Pierpont BTL 2021-1 PLC 1.1
Canada Square Funding 2021-2 PLC 1.0
Tower Bridge Funding 2024-3 PLC 1.0
Together Asset Backed Securitisation 2022-CRE1 PLC 1.0
Canterbury Finance No. 3 PLC 1.0
Tower Bridge Funding 2022-1 PLC 1.0
London Wall Mortgage Capital PLC 2021-2 0.9
Precise Mortgage Funding 2020-1B PLC 0.9
Canada Square Funding 2021-1 PLC 0.9
Elstree Funding No.2 PLC 0.8
Finsbury Square 2021-1 Green PLC 0.8
Polaris 2022-1 PLC 0.8
Elstree Funding No.4 PLC 0.7
Elstree Funding No.5 PLC 0.7
Tower Bridge Funding 2021-2 PLC 0.7
Canada Square Funding 2020-2 PLC 0.7
Canada Square Funding 7 PLC 0.6
Tower Bridge Funding 2023-1 PLC 0.6
Polaris 2023-2 PLC 0.6
Tudor Rose Mortgages 2021-1 PLC 0.5
Finsbury Square 2021-2 PLC 0.5
Polaris 2022-2 PLC 0.5
Together Asset Backed Securitisation 2021-CRE2 PLC 0.5
Together Asset Backed Securitisation 2021-1ST1 PLC 0.4
Together Asset Backed Securitisation 2021-CRE1 PLC 0.3
Polaris 2021-1 PLC 0.3
Polaris 2023-1 PLC 0.2
Polaris 2024-1 PLC 0.2
Other transactions 0.2

Related Research

Primary Contact:Feliciano P Pereira, CFA, Madrid 34-676-751-559;
feliciano.pereira@spglobal.com
Secondary Contact:Alastair Bigley, London 44-20-7176-3245;
Alastair.Bigley@spglobal.com

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