UK Finance Buy-to-Let Mortgage Market Update

January 21, 2026

UK Finance today releases its buy-to-let (BTL) mortgage market update for Q3 2025, looking at trends in lending to borrowers accessing the market.

In Q3 2025 there were 59,467 new buy-to-let loans advanced in the UK, worth £10.9 billion. This was up quite significantly compared with the same quarter in the previous year, 22.7 per cent by number (28.2 per cent by value).

The average gross buy-to-let rental yield for the UK in Q3 2025 was 7.15 per cent, compared with 6.93 per cent in the same quarter in the previous year.

The average interest rate across all new buy-to-let loans in the UK was 4.85 per cent in Q3 2025. This was 15 basis points lower than in the previous quarter, and 37 basis points lower than in the same quarter of 2024.

Reflecting the downwards movement in interest rates, the average buy-to-let interest cover ratio (ICR) for the UK in Q3 2025 was 215 per cent, up from 195 per cent in Q3 2024 and 210 in the previous quarter.

The number of BTL fixed rate mortgages outstanding in Q3 2025 was 1.44 million, 2.3 per cent up on a year previously. In contrast, the number of variable rate loans outstanding fell by 9.7 per cent to 488,000.

At the end of Q3 2025 there were 10,420 buy-to-let mortgages in arrears greater than 2.5 per cent of the outstanding balance. This was down 850 from the previous quarter.

There were 900 buy-to-let mortgage possessions taken in Q3 2025, up 28.6 per cent from 700 in the same quarter a year previously.

 

Megan Eighteen, ARLA Propertymark President, comments:

“These figures point to a more positive sentiment in the buy-to-let market during the third quarter of 2025. However, the rise in buy-to-let mortgage possessions over the same period a year earlier is a clear reminder that affordability pressures persist for some landlords, particularly those facing higher borrowing and operating costs.

“Today’s rise in inflation, reflecting further price increases in December, will be closely watched and could play a significant role in shaping the Bank of England’s next steps on the base rate. Any sustained easing in inflation would help restore confidence and improve borrowing conditions.

“As the year progresses, it would be encouraging to see this translate into a more stable and affordable buy-to-let market. Continued investment in the sector remains essential to support supply and deliver much-needed new rental homes at a time when demand continues to outstrip availability.”

EAN Breaking News

Breaking News from the team at Estate Agent Networking. Have a new story to share with us? Then please get in contact today! When and where we can we will refer to third party websites with a 'live link back' where news was released first.

You May Also Enjoy

Home and Living

5 trends driving London’s landscaped gardens

London gardens can add more than £205,000 in value as Chelsea tops table for prime buyers seeking outdoor space Ahead of this year’s Chelsea Flower Show, research by Enness Global has revealed that a garden can add more than £205,000 to the value of a London home, whilst Chelsea fittingly boasts the highest degree of…
Read More →
how to present your property for sale
Breaking News

Six in 10 tenants say Renters’ Rights Act improves their housing protections and conditions

Awareness of the Renter’s Rights Act 2025 has increased amongst tenants from 19 per cent in October after the bill passed, to 60 per cent when it came into effect 19 per cent of renters are now more likely to remain in their current property but 45 per cent are concerned about the legislation’s long-term…
Read More →
Rightmove logo
Breaking News

West Oxfordshire tops list of first-time hotspots defying national trend

New analysis by the UK’s largest property platform Rightmove reveals the first-time buyer hotspots where buyer demand is increasing, bucking the national trend over the last month West Oxfordshire leads the way, with demand for typical first-time buyer properties up by 45% year-on-year: A 37% increase in available first-time buyer type homes for sale and…
Read More →
Breaking News

ONS Private Rent and House Prices Index- May 2026

The latest ONS house price figures show that the sales market that is broadly flat. Average UK house prices were unchanged year-on-year at £268,000 in March 2026, with annual house price inflation slowing from 1.7% in February to 0.0% in March. Main points Average UK monthly private rents increased by 3.5%, to £1,381, in the…
Read More →
Overseas Property

Cyprus in demand as international property inquiries spike

Interest in Cyprus has more than tripled since the start of March, while sales to non-EU buyers have spiked by more than a fifth Cyprus is the best option for residency by investment in a major EU Mediterranean country, after Spain closed its Golden Visa in April 2025 and Portugal closed the property route in…
Read More →
Breaking News

Inflation falls to 2.8%

Industry response to the latest inflation figures and their impact on the housing market.   Nathan Emerson, CEO of Propertymark “It is very welcome news to see inflation dip this month; however, today’s figures still sit some distance away from the Bank of England’s target rate of 2%. It remains important to consider continued overall…
Read More →