Buy-to-let (BTL) lending registered a sharp increase at the end of 2025, driven by a boost in remortgage activity, according to new figures released by UK Finance.

The banking trade body reported that Q4 2025 saw 59,489 new BTL loans advanced in the UK, worth £11.2bn.

UK Finance, which said the growth was “largely concentrated in remortgage activity”, noted that this was up significantly compared with the same quarter in the previous year, having jumped by 18.2% in the number of loans and 21.3% by their value.

Figures also showed that the average gross BTL rental yield in the quarter was 7.18%, which was up from 6.99% in the same quarter a year previously.

Across the BTL market, there were 1.46 million fixed rate mortgages outstanding in Q4 2025, a level 2% on the final quarter of 2024. In contrast, the number of variable rate loans outstanding fell by a further 9.8% to 466,000.

Head of underwriting, BTL, at MT Finance, Raheel Butt, commented that the latest UK Finance data provides a “definitive conclusion to a year defined by professional resilience”.

“The final quarter saw the momentum of the year-on-year surge in lending value reach its peak. This activity was fuelled by a continued easing of borrowing costs,” Butt said.

“Ultimately, Q4’s performance confirms that the barrier to entry has evolved. New entrants are now by-passers of the low-rate lure of the past, instead entering the market with a sophisticated focus on strategic capital gains and long-term portfolio growth. BTL is not just continuing; it is maturing into a more disciplined, professional and institutionalised sector.”

Managing director of mortgages at Paragon Bank, Louisa Sedgwick, added that “landlord confidence was beginning to improve towards the end of last year.”

“The data shows a clear pickup in activity, with both lending volumes and values up materially on the same quarter in the previous year,” Sedgwick said.

“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.”

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