Over the past week or so, we have all found ourselves watching developments in the Middle East again. Renewed tensions involving the USA and Iran have inevitably prompted questions about whether we are about to experience another period of higher funding costs, mortgage repricing and increased market uncertainty, just as we did earlier this year.
If that sounds familiar, it is because we have already been through this cycle once in 2026. The difference now is that advisers, lenders and landlords have already experienced it, and the more interesting question is not whether volatility will return, but whether the buy-to-let market will react in the same way it did back in March and into April?
The first quarter of the year provides a useful starting point. UK Finance’s latest figures showed buy-to-let lending increasing year-on-year, but with remortgaging accounting for much of that activity as advisers and their landlord clients quite understandably concentrated on protecting existing portfolios while funding costs remained uncertain.
That was entirely consistent with the mood across the market at the time because, when volatility arrives unexpectedly, securing existing borrowing often takes priority over making new investments. However, that was only one part of the story.
What happened next?
Our own Rental Barometer and lending figures for Q2 suggest confidence returned much more quickly than many people anticipated.
Purchase business increased from 33% of all Fleet applications in Q1 to 36% in Q2, moving back towards the levels we were seeing a year ago. At the same time, average rental yields across England and Wales remained healthy at 7.8%, while lenders like ourselves were once again able to reduce pricing and reintroduce products as funding conditions improved following greater stability in financial markets.
Those figures suggest many landlords viewed the disruption during the early part of Q2 as a temporary interruption rather than a reason to abandon investment plans altogether. Equally revealing is the changing profile of the landlords themselves.
The average Fleet borrower now owns 16 investment properties, compared with 10 only a year ago, while nearly eight out of every 10 applications now come through limited companies. Landlords with 15 or more buy-to-let properties account for 26% of our business, compared with 16% during the same period last year, demonstrating larger portfolio investors continue to expand despite the wider economic and political backdrop.
Will the market respond differently this time?
That brings us back to today. If geopolitical tensions continue to escalate, there is every possibility financial markets could react, funding costs could increase and mortgage pricing could come under pressure. That may already be happening.
However, there is another possibility worth considering. Perhaps advisers, lenders and landlords will simply respond differently because they have already experienced this process once before? The first time markets become volatile, uncertainty often encourages caution because nobody knows how long disruption will last. The second time, there is at least recent experience to demonstrate that markets can recover just as quickly as they deteriorate.
That experience matters because it may allow long-term investment decisions to be viewed through a different lens.
Professional landlords are looking beyond the headlines
Alongside renewed geopolitical uncertainty, advisers are now beginning to receive questions about what a new Prime Minister could mean for housing policy, particularly around stamp duty, council tax and wider property taxation. Those discussions are understandable, but they also demonstrate how quickly headlines can run ahead of reality.
Even if Government does decide to pursue significant property tax reform, there remains considerable uncertainty over what any replacement system might look like, when it might be introduced and, perhaps most importantly for our sector, whether landlords would be treated in the same way as owner-occupiers.
To be honest and obvious, there are considerably more questions than answers at this stage. What we do know, however, is that today’s professional landlord has already demonstrated an impressive ability to adapt.
They have continued expanding portfolios through higher interest rates, changing taxation, regulatory reform, geopolitical uncertainty and fluctuating mortgage pricing, while our own figures suggest experienced investors remain focused on identifying opportunities rather than waiting for perfect conditions.
The second half of 2026 may yet prove to be a rinse and repeat of the first. If it does, I suspect professional landlords will once again do what they have consistently demonstrated over recent years, namely rolling with the punches, adapting quickly and continuing to invest whenever the long-term fundamentals still make sense.
After all, markets may move, heads of Government may change and headlines will always come and go, but successful property investment has never been built on trying to predict tomorrow’s news.