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New buy-to-let loans up nearly 39%: "Buy-to-let is dead. Long live buy-to-let"

ended 23. July 2025

“Buy-to-let is dead. Long live buy-to-let.” That’s the verdict from mortgage broker Harps Garcha, as landlords return to the market in force, shrugging off years of rising rates, tax clampdowns, regulatory pain and dire headlines.

New data from UK Finance published this morning shows a surge in buy-to-let lending, with 58,347 new loans worth £10.5 billion advanced in the first quarter of 2025 — a 38.6% rise in volume and a 46.8% leap in value compared with the same period last year.

Harps Garcha, director at Brooklyns Financial, said: “This data confirms serious landlords remain committed to the sector, adjusting their strategies to ride out the recent turbulence. With interest rates gradually falling and rental prices continuing to rise, improving buy-to-let yields are no surprise. It’s been a challenging period, particularly for those with high levels of borrowing.

"But landlords who haven’t over-geared are well-placed to weather the ongoing changes and emerge stronger as market conditions begin to shift in their favour. Many who wrote off buy-to-let have been proved wrong.”

The numbers bear that out. The average gross rental yield in Q1 2025 stood at 6.94%, slightly up from 6.88% a year earlier, while the average interest rate on new buy-to-let loans dropped to 4.99%, down 41 basis points from the same time last year. Interest cover ratios — a key measure of affordability — improved to 202%, up from 190%.

Dariusz Karpowicz, director at Albion Financial Advice, said: “The buy-to-let obituary has been greatly exaggerated. With new lending surging and rental yields holding firm at nearly 7%, savvy investors are quietly expanding portfolios while others panic. 

"Professional landlords are capitalising on rising rental income and falling rates, snapping up quality properties from accidental landlords who perhaps didn’t structure their investments through limited companies. Yes, possessions have risen, but 810 cases against a market of nearly 2 million loans hardly signals an apocalypse — it’s more of a natural market correction than a systemic crisis. The fundamentals for those playing the long game remain solid.”

Babek Ismayil, Founder at OneDome, commented: “These figures paint a picture of resilience in the sector. A 38.6% rise in new buy-to-let loans and falling arrears signal renewed investor confidence, buoyed by easing interest rates and solid rental yields. But the uptick in possessions is a red flag that can't be ignored - it’s a reminder that while opportunities remain, risk management is more critical than ever for landlords navigating this new phase of the market.”

Not everyone is thriving, though. While arrears have dipped slightly — with 11,830 landlords behind on payments by more than 2.5%, down 780 on the previous quarter — the number of possessions is up sharply, rising by 28.6% year-on-year.

Emma Jones, managing director at WhenTheBankSaysNo, said: “There’s clearly still life in the buy-to-let market, with a sharp rise in new lending showing landlords haven’t lost their appetite, even with all the recent challenges. It’s encouraging to see arrears coming down slightly, but the jump in possessions is a concern and shows that while some landlords are investing, others are still feeling the squeeze. It’s a mixed picture, but overall, the sector’s proving more resilient than many expected, particularly given everything it’s been through.”

For those with a long-term view, buy-to-let is far from dead. Justin Moy, managing director at EHF Mortgages, said: “As typical rental income has increased significantly over the last few years, the expected freefall of landlord sales hasn't been as ferocious as some experts believed.

"Those who are in it for the long term have managed to grow their portfolios with well-priced, quality properties, whilst seeing mortgage rates fall by some distance, even if fees are still a bit chunky in comparison. Possession numbers, whilst higher, are still small compared to the overall market size. Those investing now have greater knowledge, better support, and their eyes are wide open to both the opportunity and the risks, too.”

The shape of the sector is also shifting. The number of fixed-rate BTL mortgages climbed by nearly 5% in the past year, while the number of variable-rate loans fell by almost 16% — a clear sign landlords are planning for the long haul.

Ranald Mitchell, director at Charwin Mortgages, said: “There’s life in the old landlord yet. Buy-to-let is bouncing back with serious momentum, as new lending surges nearly 40% compared to last year. Lower interest rates, healthier yields, and a stronger interest cover ratio all point to a sector regaining its footing after enduring the biggest shake-up in its history.

"While arrears and possessions remain part of the picture, arrears are falling and borrowing costs are easing. The shift away from variable rates towards fixed deals shows landlords are thinking ahead and backing stability. After years of punishing tax changes and heavy-handed regulation, the tide is turning. Buy-to-let is not just surviving — it is starting to thrive again, and investors are quietly taking notice.”

Sean Horton, managing director at Respect Mortgages, believes landlords are learning to adapt to constant regulatory change. “Despite relentless government intervention and looming EPC requirements, buy-to-let refuses to roll over quietly. New lending jumped 38.6% year-on-year, whilst rates dropped 41 basis points to 4.99% — proof that determined investors are finding ways around the regulatory maze. They’re smarter, more cautious, and more prepared than ever.”

And the appetite for rental property remains strong, both from tenants and landlords.

Harry Goodliffe, director at HTG Mortgages, said: “Buy-to-let isn’t dead, it’s just had a reality check. The days of fast gains and loose lending are gone, but for investors who understand the fundamentals, there’s still real opportunity. Rental demand remains strong because, frankly, people still prefer to ring a landlord when something breaks. That convenience, paired with rising rents due to chronic undersupply, is what keeps this market ticking.

"Government policy may have thinned out the rental supply, but it’s also made the remaining properties more valuable. If anything, the latest data shows a leaner, more professional BTL sector emerging — one built for the long haul, not the short win.”

10 responses from the Newspage community

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Editor
Harps Garcha
Director at Brooklyns Financial
Buy to let is dead. Long live buy to let. As this data confirms, serious landlords remain committed to the sector, adjusting their strategies to ride out the recent turbulence. With interest rates gradually falling and rental prices continuing to rise, improving buy-to-let yields are no surprise. It’s been a challenging period, particularly for those with high levels of borrowing. But landlords who haven’t over-geared are well-placed to weather the ongoing changes and emerge stronger as market conditions begin to shift in their favour. Many who wrote off buy-to-let have been proved wrong.
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Editor
Justin Moy
Managing Director at EHF Mortgages
As typical rental income has increased significantly over the last few years, the expected freefall of landlord sales hasn't been as ferocious as some experts believed. Those who are in it for the long term have managed to grow their portfolios with well-priced, quality properties, whilst seeing mortgage rates fall by some distance, even if fees are still a bit chunky in comparison. Possession numbers, whilst higher, are still small compared to the overall market size. Those investing now have greater knowledge and their eyes are wide open to both the opportunity and the risks too.
Copy

Editor
Dariusz Karpowicz
Director at Albion Financial Advice
The buy-to-let obituary has been greatly exaggerated – with new lending surging 38.6% and rental yields holding firm at nearly 7%, savvy investors are quietly expanding portfolios while others panic. Professional landlords are capitalising on rising rental income and falling rates, snapping up quality properties from accidental landlords who perhaps didn't structure their investments through limited companies. With mortgage rates down 41 basis points year-on-year and interest cover ratios improving to 202%, the fundamentals remain sound for those playing the long game. Yes, possessions have risen, but 810 cases against a market of nearly 2 million loans hardly signal apocalypse – it's more market correction than meltdown.
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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
There’s life in the old UK buy-to-let dog yet. The 38.6% surge in new BTL loans between the first quarters of 2024 and 2025 signals strong investor confidence, fuelled by falling interest rates, improving affordability, and the rise in rental yields to 6.94% supported by strong rental demand amidst a persistent supply-demand imbalance in the private rental sector. The shift toward fixed-rate mortgages over variable-rate loans reflects landlords locking in lower rates to shield against potential future volatility, a prudent move given domestic regulatory changes under this Labour government. This doesn’t mean all in the BTL garden is rosy. The 28.6% increase in BTL mortgage possessions and 11,830 mortgages in arrears highlight ongoing financial strain for some landlords, particularly those with single properties or interest-only loans, who are more vulnerable to rate hikes or economic shocks. The Renters’ Rights Bill and further tax pressures could further squeeze smaller landlords.
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Editor
Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
There’s life in the old landlord yet. Buy-to-let is bouncing back with serious momentum, as new lending surges nearly 40 percent compared to last year. Lower interest rates, healthier yields, and a stronger interest cover ratio point to a sector regaining its footing after enduring the biggest shake-up in its history. While arrears and possessions remain part of the picture, arrears are falling and borrowing costs are easing. The shift away from variable rates towards fixed deals shows landlords are thinking ahead and backing stability. After years of punishing tax changes and heavy-handed regulation, the tide is turning. Buy-to-let is not just surviving, it is starting to thrive again – and investors are taking notice.
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Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
There’s clearly still life in the buy-to-let market, with a sharp rise in new lending showing landlords haven’t lost their appetite, even with all the recent challenges. It’s encouraging to see arrears coming down slightly, but the jump in possessions is a concern and shows that while some landlords are investing, others are still feeling the squeeze. It’s a mixed picture, but overall, the sector’s proving more resilient than many expected.
Copy

Editor
Harry Goodliffe
Director at HTG Mortgages
Buy-to-let isn’t dead, it’s just had a reality check. The days of fast gains and loose lending are gone, but for investors who understand the fundamentals, there’s still real opportunity. Rental demand remains strong because, frankly, people still prefer to ring a landlord when something breaks. That convenience, paired with rising rents due to chronic undersupply, is what keeps this market ticking. Government policy may have thinned out the rental supply, but it’s also made the remaining properties more valuable. If anything, the latest data shows a leaner, more professional BTL sector emerging — one built for the long haul, not the short win.
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Editor
Scott Gallacher
Director at Rowley Turton
These figures are something of a surprise. While a near 7% average rental yield looks attractive on the surface, many of our professional landlord clients estimate that around 25% of gross rental income is lost to costs such as unlet periods, maintenance, compliance, safety checks, and legal fees.

When you factor in still-high interest rates, a hostile tax environment, and stagnant or falling house prices, it’s no wonder I’m personally seeing the opposite trend — more landlords exiting the buy-to-let market than entering it.

It may be that these numbers reflect a temporary uptick driven by remortgaging or portfolio restructuring, rather than genuine new investment. Either way, I’d urge caution. The days of buy-to-let as an easy route to wealth are long gone — landlords now need to treat it as a serious, professionally run business.
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Editor
Babek Ismayil
CEO at homebuying platform OneDome
These figures paint a picture of resilience in the sector. A 38.6% rise in new buy-to-let loans and falling arrears signal renewed investor confidence, buoyed by easing interest rates and solid rental yields. But the uptick in possessions is a red flag that can't be ignored - it’s a reminder that while opportunities remain, risk management is more critical than ever for landlords navigating this new phase of the market.
Copy

Sean Horton
Managing Director at Respect Mortgages
Despite relentless government intervention and looming EPC requirements, buy-to-let refuses to roll over quietly. New lending jumped 38.6% year-on-year, whilst rates dropped 41 basis points to 4.99% – proof that determined investors are finding ways around the regulatory maze.