There was a 22.7% annual jump in the number of new buy-to-let (BTL) loans advanced in the UK during Q3 last year, new figures released by UK Finance have shown.

These loans totalled a combined £10.9bn across the quarter, a value up by 28.2% compared with Q3 in 2024.

UK Finance’s latest data also revealed that the average gross BTL rental yield for the UK in Q3 was 7.15%, which was up from 6.93% in the same quarter in the previous year.

The banking trade body reported that there were 1.44 million BTL fixed rate mortgages outstanding in Q3 2025, a total 2.3% up on the previous year. By contrast, the number of variable rate loans outstanding fell by 9.7% in the quarter, to 488,000.

Director of mortgages at MT Finance, Marylen Edwards, said that the UK Finance data provides a “compelling snapshot of a market in strategic transition”.

“While the industry prepares for the Renters’ Rights Bill changes which start to come into force from 1 May, professional landlords aren't just surviving, they are recalibrating,” Edwards added.

“We are seeing an increased year-on-year surge in lending value, while the average interest rate for new BTL loans has eased to 4.85%, down 37 basis points from a year ago. This softening is pushing the recalibration of portfolios as landlords lock in stability before the 1 May deadline.

“Despite the headwinds of 2025’s rate environment, it is clear the sector is still actively transacting and business continues to grow. The Q3 data reveals a definitive flight to quality, where equity-rich, professional investors are capitalising to strengthen and diversify their portfolios. New landlords coming into the market are looking at longer-term strategic capital gains and the ability to uplift and grow a portfolio.”

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