Analysis of the buy-to-let market in Q4 of 2025 shows, compared to the same time a year earlier, the number of loans being advanced was up ‘quite significantly’ by 18.2% according to the banking trade body, UK Finance.
This growth was mainly down to the large number of remortgages in the final three months of 2025.
But average yields also increased in the same period from 6.99% at the end of 2024 to 7.18% in Q4 of last year.
The report also showed the average interest rate for buy-to-let mortgages during this period was 4.77%. This is eight basis points lower than in the previous quarter, and 32 basis points lower than in the same quarter of 2024.
At the end of Q4 2025, as many as 9,520 buy-to-let mortgages were in arrears by more than 2.5% of the outstanding balance – this is 910 less than in the previous quarter.
However, as many as 770 possessions were taken on buy-to-let mortgages during this period – a rise of 10% on the same quarter a year previously.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said this was indicative of the difficulties facing buy-to-let landlords, who have been hit with tighter legislation and rising running costs.
“It is squeezing them from all sides,” she said. “Repossessions of buy-to-let properties are up by 10% year-on-year, and it is worrying to think that landlords could be failing to keep up with mortgage repayments.
“In the months ahead, the cost of living is predicted to worsen, and this will be magnified if landlords are due to come off a cheap fixed rate, because mortgage rates have been rising.
“Those who were to take out a mortgage now compared to the start of last month will face higher repayments of around £1,300 more a year. This is based on a borrowing of £250,000, over 25 years at 5.45%, versus 4.66% at the start of March 2026.”
However, Louisa Sedgwick, managing director of mortgages at Paragon Bank, said the figures indicated landlord confidence was beginning to improve.
“The data shows a clear pickup in activity, with both lending volumes and values up materially on the same quarter in the previous year,” she added.
“While the figures pre-date the latest rise in geopolitical tensions and the resulting pressure on rates and mortgage pricing, they still point to underlying resilience in the sector. Where conditions are stable and returns remain viable, landlords continue to invest against a backdrop of sustained demand for rented homes and limited supply.”