A total 58,051 new buy-to-let (BTL) loans advanced in the UK in Q2 2026, worth £10.7bn, and up by 20.6% by number or 25% by value compared with the same quarter in the previous year, latest figures published by UK Finance have revealed.
The average gross (BTL) rental yield for the UK in Q2 2026 was 7.27%, almost unchanged from 7.26% in the same quarter a year previously.
The average interest rate across all new (BTL) loans in the UK was 4.82% in Q2 2026. This was 12 basis points higher than in the previous quarter, but 18 basis points lower than in the same quarter of 2025.
Reflecting the movement in interest rates the average (BTL) interest cover ratio (ICR) for the UK in Q2 2026 was 217%, up from 210% in Q2 2025 and down from 221 in the previous quarter.
The number of BTL fixed rate mortgages outstanding in Q2 2026 was 1.46 million, 0.7% down on a year previously. The number of variable rate loans outstanding also fell by a further 3% to 450,000.
At the end of Q2 2026 there were 8,390 buy-to-let mortgages in arrears greater than 2.5% of the outstanding balance. This was down 570 from the previous quarter.
There were 630 buy-to-let mortgage possessions taken in Q2 2026, down 20.3% from the same quarter a year previously.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, commented: “Remortgaging continues to be the story of 2026, accounting for approximately three quarters of completed buy-to-let loans during the period. We expect that trend to continue throughout the rest of this year and into 2027 as five-year loans written during the buoyant market of 2021 and 2022 mature.
“Overall lending has remained fairly robust considering the impact of the Iran War on mortgaging pricing, with the value and number of loans for buy-to-let house purchase in line with the average quarterly level recorded since 2024, the period when the market entered recovery following the mini-Budget.”
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