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They once turbo-charged the property market. Now they’re a dying breed
Back in the day it was seen as a foolproof way to amass wealth. Now it’s a relic of the Celtic Tiger era. The buy-to-let mortgage turbocharged Ireland’s property market in the late 1990s and 2000s.
When the market soured, these mortgages had the highest rate of arrears and became the product most associated with loose lending practices. In 2012, there were about 150,000 buy-to-let mortgage accounts in the State. By the second quarter of this year, that number had dropped to 44,729 – a fall of approximately 70 per cent. About 8 per cent of these accounts reman in long-term arrears – double the rate for owner-occupier mortgages.
The buy-to-let mortgage was introduced to the UK and Ireland in the mid-1990s. The product was created to channel investment into rented property. It helped to establish housing as a financial asset, which, for many, is where it all went wrong. The Central Bank ’s mortgage rules, introduced in 2015, put tighter controls around lending, specifically buy-to-let lending, requiring buyers to provide a minimum 30 per cent deposit.
This fast-tracked the downward slide in these mortgages. According to Central Bank statistics released this week, the majority of outstanding buy-to-let mortgages in the first quarter of 2026 were attributable to OFIs or non-banks, reflecting the domestic banking sector’s aversion to buy-to-lets. The other aspect to the demise of these mortgage products is the exodus of smaller landlords from the Irish rental market.
For decades, the private rental market here was populated by small-time landlords, owning one or two properties, in contrast to the new wave of institutional landlords with hundreds of homes on their books. Many of these small-time investors used savings or inheritances and buy-to-let mortgages to acquire investment properties. Many now find themselves squeezed out of the market by stricter rent controls and higher tax burdens. Exiting landlords represent between 20 and 40 per cent of second-hand home sales.
With so many prospective first-time buyers trying to get on to the property ladder, though, sympathy for landlords is in short supply.
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