Lenders advanced 58,051 new buy-to-let loans worth £10.7 billion in the second quarter of 2026, up 20.6 percent by number and 25 percent by value on the same period last year, according to fresh industry data.
The year-on-year jump needs context. Lending in Q2 2025 was unusually weak after borrowers rushed deals through ahead of stamp duty changes in the first quarter of that year. Measured against the first three months of 2026, the market looks steadier, with remortgaging edging higher while lending for new purchases slipped back slightly.
Expiring fixed-rate deals explain much of the current movement. Large numbers of landlords are rolling off fixes taken out when rates were lower, and that refinancing flow is now the single biggest driver of new lending volumes.
Remortgages drive the rebound
Remortgages accounted for more than two-thirds of new lending, with 39,631 loans completed in the quarter, up 17.6 percent by number and 20.2 percent by value on a year earlier. Compared with Q1 2026, remortgage volumes rose by 470 loans.
Loans for new house purchases totalled 16,026, up 23 percent by number and 27.9 percent by value on the depressed Q2 2025 base. Against the previous quarter, however, purchase lending fell by 845 loans, pointing to continued caution among buyers adding to portfolios. Landlords weighing a purchase against a refinance can compare current buy-to-let mortgage pricing before locking in.
James Tatch, head of analytics at UK Finance, said the figures pointed to a more resilient market but urged caution on the headline growth. “Activity in the same period last year was artificially low, as borrowers brought forward loans ahead of stamp duty changes, making the year-on-year increases look particularly strong,” he said. “Compared with Q1 this year, the market appears more stable, with remortgaging edging up while lending for new purchases eased slightly.”
Yields hold steady as rates edge up
The average gross buy-to-let rental yield across the UK stood at 7.27 percent in Q2 2026, all but unchanged from 7.26 percent a year earlier, suggesting rental income is keeping pace with higher borrowing.
The average interest rate across all new buy-to-let loans was 4.82 percent, up 12 basis points on the previous quarter but 18 basis points lower than Q2 2025. The average interest cover ratio was 217 percent, down four points on the quarter but up from 210 percent a year ago. Recent lender moves tracked by Landlord Knowledge include Foundation’s 4.99 percent remortgage deal at 75 percent loan-to-value, a sign of competition for refinancing business.
Arrears fall to lowest level in a year
Loan performance improved markedly. At the end of Q2 there were 8,390 buy-to-let mortgages in arrears of more than 2.5 percent of the balance, down 570 on the quarter and 25.6 percent lower than a year earlier. Possessions fell 20.3 percent year on year to 630 cases.
The stock of fixed-rate buy-to-let mortgages stood at 1.46 million, 0.7 percent lower than a year earlier, while variable-rate loans fell 3 percent to 450,000 as borrowers continued to favour the certainty of a fix.
Kim Lidbury, president of ARLA Propertymark, said the uplift in lending was encouraging given the pressures on the sector. Responding to the latest UK Finance lending figures, she said: “Maintaining access to competitive finance will be crucial in supporting responsible investment, helping existing landlords through the current market and encouraging continued investment in the homes needed by tenants.”
This follows Landlord Knowledge’s report on Bank of England data showing buy-to-let’s share of mortgage lending at 8 percent in Q2. Taken together, the two releases paint a consistent picture: overall mortgage activity is subdued, but the buy-to-let segment is holding its share, with refinancing doing most of the work.
Tatch warned that dearer borrowing is likely to weigh on demand, pointing to flatter lending growth across the rest of 2026. With the Autumn Budget approaching and speculation around property taxation already unsettling some landlords, the next two quarters will test whether the refinancing pipeline alone can sustain volumes.
What this means for landlords
- If your fix ends in the next six months: start the remortgage process at least three months early – the data shows most current activity is refinancing, and lenders are competing for it.
- Watch for: the Autumn Budget and any property tax changes, which could shift the maths on purchases and incorporation alike.
- Bottom line: yields are holding at 7.27 percent and arrears are falling, so the fundamentals remain sound even as rates sit higher than many had hoped.
Editor’s view
Strip out the base effect and this is a story about refinancing, not expansion. Purchase lending fell on the quarter, which tells you landlords are managing what they hold rather than adding to it. That caution makes sense with a Budget looming, but the falling arrears figure is genuinely good news.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 22 October 2026
Sources: UK Finance, Propertymark
Related reading: Bank of England: buy-to-let share falls to 8% in Q2
