New figures from the mortgage lenders’ trade body shows that at the end of the second quarter of 2026 there were 8,390 buy-to-let mortgages in arrears over 2.5%.
This was down 570 from the previous quarter and down 25.6% compared to Q2 2025.
There were 630 buy-to-let mortgage possessions in Q2 2026, down 20.3% from the same period last year.
In Q2 2026, 58,051 new buy-to-let loans were issued in the UK, worth £10.7 billion. Compared with Q2 2025, the number of loans increased by 20.6%, while their total value rose by 25%.
Compared with the same quarter a year earlier, lending activity increased sharply. This largely reflects the impact of stamp duty changes in Q1 2025, which suppressed market activity and resulted in lower levels of lending in Q2 2025, together with increased remortgaging activity driven by high numbers of fixed rate loans expiring.
Buy-to-let loans for new house purchases totalled 16,026, up 23% by number and 27.9% by value compared with Q2 2025.
The average gross buy-to-let 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 buy-to-let interest cover ratio for the UK was 217% in Q2 2026. This was 4% lower than the previous quarter but up 210% compared to Q2 2025, reflecting movement in interest rates.
The number of buy-to-let fixed-rate mortgages outstanding was 1.46m in Q2 2026, 0.7% lower than a year earlier.
The number of variable-rate loans outstanding fell 3% to 450,000.
A UK Finance spokesperson says: “The latest figures point to a more resilient buy-to-let market, but the headline growth should be viewed in context.
“Activity in the same period last year was artificially low, as borrowers brought forward loans ahead of stamp duty changes, making the year-on-year increases look particularly strong.
“Compared with Q1 this year, the market appears more stable, with remortgaging edging up while lending for new purchases eased slightly.
“Looking ahead, higher borrowing costs are likely weighing down on buy-to-let demand, underpinning flatter lending growth across 2026.”
In response, Mark Harris – chief executive of mortgage broker SPF Private Clients – says: “An increase in new buy-to-let loans advanced in the second quarter, up on the same period last year, suggest investors still recognise opportunities in the market.
“Perhaps the steadiness of average yields explains that – investing in rental property is still working for many landlords and experienced ones in particular are expanding their portfolios where opportunities arise.
“The average interest rate across new BTL loans was 12 basis points higher than the previous quarter but while this is unwelcome, it is still 18 basis points lower than the same quarter last year.
“With the number of landlords in arrears and the number of buy-to-let possessions falling, the outlook for the sector is brighter than one might think given that the regulatory and tax burden on investors is increasing.
“The sector is becoming more professional and with more landlords incorporating in order to maximise returns, there are plenty of opportunities out there. However, now is not the time for further interference from government – the sector needs time to settle and get to grips with recent legislative changes.”
This article is taken from Landlord Today