Lenders advanced 58,272 new buy-to-let loans in the UK in Q1 2026, worth £10.8 billion, according to UK Finance's latest Buy-to-let Mortgage Market Update. This was up 3.26% by number compared with the same quarter the previous year, and up 7.02% by value.
Within that total, buy-to-let remortgages grew to 39,160, up 11.1% year-on-year, while loans for house purchase fell by 14.9% to 16,871 in Q1 2026.
Regional performance varied sharply. Buy-to-let house purchase lending in Scotland and Wales grew by 22.6% and 20.6% by volume respectively, driven by particularly strong rental yields and interest cover ratios in the quarter. England and Northern Ireland, by contrast, saw volumes fall by 18.7% and 11.8%.
The average gross buy-to-let rental yield for the UK reached 7.21% in Q1 2026, up from 6.93% in the same quarter a year earlier. The average interest rate across all new buy-to-let loans stood at 4.71%, 6 basis points lower than the previous quarter and 29 basis points lower than the same quarter of 2025. Reflecting that downward movement in rates, the average buy-to-let interest cover ratio for the UK rose to 221% in Q1 2026, up from 204% in Q1 2025 and 218% in the previous quarter.
The number of buy-to-let fixed rate mortgages outstanding reached 1.47 million in Q1 2026, up 1.4% on a year earlier. The number of variable-rate loans outstanding, meanwhile, fell by a further 9.5% to 453,000.
At the end of Q1 2026, 8,960 buy-to-let mortgages were in arrears greater than 2.5% of the outstanding balance, down 560 from the previous quarter. Buy-to-let mortgage possessions totalled 810 in Q1 2026, unchanged from the same quarter a year earlier.
"Although buy-to-let lending moderated from the stronger levels seen at the end of 2025, activity in the first quarter remained ahead of the same period last year, indicating that the market continues to move in the right direction where conditions are supportive," said Louisa Sedgwick, managing director of mortgages at Paragon Bank, commenting on the figures.
"Remortgaging remained a significant driver of lending and was higher than a year earlier. This points to landlords actively refinancing as they respond to broader affordability considerations and manage their portfolios, including supporting longer-term plans such as expansion and investment in existing properties.
"The value of outstanding balances also rose above £313 billion, underlining the resilience of the sector and its continuing role in supporting investment in privately rented homes."
Mark Harris, chief executive of mortgage broker SPF Private Clients, said, “Although the implementation of the Renters’ Rights Act was imminent during the period this data covers, it doesn't seem to have deterred landlords.
"An increase in new buy-to-let loans advanced in the first quarter of the year, up compared with the same period the previous year, points to investors who still recognise opportunities in the market. Perhaps the uptick in average yields explains that – investing in rental property is still working for many landlords and experienced ones in particular are expanding their portfolios where opportunities arise.
“Landlords continue to favour fixed-rate mortgages for the certainty they bring in what are volatile times in terms of pricing, with the number opting for variable rate loans falling. The average interest rate across new BTL loans was six basis points lower than the previous quarter and 29 basis points down on the same quarter last year, with this downwards trend a further factor encouraging landlords to invest. With the average interest cover ratio rising thanks to falling lending rates, landlords are not overstretching themselves.
“With the number of landlords in arrears falling and possessions unchanged, the outlook for the sector is brighter than one might think given that the regulatory and tax burden on investors is increasing.
"The sector is becoming more professional and with more landlords incorporating in order to maximise returns, there are plenty of opportunities out there. However, now is not the time for further interference from government - the sector needs time to settle and get to grips with recent legislative changes.”
Richard Pike, sales and marketing director at Phoebus Software, said, "The latest figures from UK Finance show the buy-to-let market is in good health. Mortgage volumes in Q1 were up 3% by number and 7% by value year-on-year, driven by remortgage activity.
"While some smaller landlords have chosen to exit amid higher costs and regulatory change, larger portfolio landlords continue to invest and adapt. The trend shows the buy-to-let market is becoming more professional, not less resilient.
"Importantly, that transition has not been accompanied by rising levels of distress. Buy-to-let arrears remain low, demonstrating the sector's resilience despite a challenging economic backdrop.
"For lenders and servicers, the priority is ensuring they have the technology, data and operational agility to support a changing landlord base. As portfolios become more sophisticated, servicing will play an increasingly important role in maintaining performance, identifying risk, and delivering better customer outcomes, and so it’s vital that lenders have the right servicing partner.”
