In Q4 2025 there were 59,489 new buy-to-let loans advanced in the UK, worth £11.2 billion, according to the latest figures from UK Finance.
This was up quite significantly compared with the same quarter in the previous year, 18.2% by number and 21.3% by value, with the growth largely concentrated in remortgage activity.
The average interest rate across all new buy-to-let loans in the UK was 4.77% in Q4 2025. This was eight basis points lower than in the previous quarter, and 32 basis points lower than in the same quarter of 2024.
Reflecting the downwards movement in interest rates, the average buy-to-let interest cover ratio (ICR) for the UK in Q4 2025 was 218%, up from 201% in Q4 2024 and 215 in the previous quarter.
At the end of Q4 2025 there were 9,520 buy-to-let mortgages in arrears greater than 2.5% of the outstanding balance, down 910 from the previous quarter. There were 770 buy-to-let mortgage possessions taken in Q4, up 10% from 700 in the same quarter a year previously.
James Tatch, head of analytics at UK Finance, said: “The buy-to-let market overall was resilient at the end of last year, with the number of loans advanced around a fifth higher than at the same time the previous year. But, with growth concentrated in remortgage markets, new demand for buy-to-let purchase remains fragile, falling slightly in Q4 compared with the same quarter a year ago.
“Investors took advantage of falling interest rates to refinance their borrowing, although instability in the mortgage market in recent weeks has pushed up borrowing costs, which may well dampen the growth buy-to-let remortgaging somewhat.
“However, a combination of the regulatory and tax measures already in place, combined with the measures in the Renters’ Rights Bill, which will come into force next month, are likely to continue to weigh down on new demand activity. We expect a broadly flat picture for buy-to-let purchase lending this year, compared to levels seen a year ago.”
Raheel Butt, head of underwriting at MT Finance, commented: “This 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.
“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. Buy-to-let is not just continuing; it is maturing into a more disciplined, professional and institutionalised sector.”
Louisa Sedgwick, managing director of mortgages at Paragon Bank, added: “UK Finance’s Q4 2025 figures indicate 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.
“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.”
