Buy-to-let in 2026 - Steady, more professional and adapting

After years of changing tax rules, higher borrowing costs and tighter regulation, many expected landlords to exit the market. The latest UK Finance data paints a different picture. In Q1 2026 there were just over 58,000 buy-to-let loans across the UK, with total lending up 7% to £10.8 billion. Behind that headline rise are several clear trends worth noting.

Refinancing over expansion

Most of the lending growth came from remortgaging. Remortgage activity climbed 11.1% to about 39,160 loans, while loans for property purchases dropped 14.9% to 16,871. In short, many landlords are focusing on existing portfolios rather than buying more properties.

A move toward certainty

Landlords are favouring fixed-rate deals. There were around 1.466 million fixed-rate buy-to-let mortgages outstanding (up 1.4% year-on-year), while variable-rate mortgages fell to about 453,000 (down 9.5%). Predictable monthly payments remain a priority as owners manage cashflow and guard against future increases.

Affordability is improving as rates ease

Average interest rates on new buy-to-let loans eased to 4.71% in Q1, roughly 29 basis points lower than a year earlier. That has helped interest cover ratios: the average rose from 204% a year ago to 221% now, meaning rental income covers more than twice the mortgage interest cost on average.

Rents and yields rising

Stronger rents have lifted returns. Average gross buy-to-let rental yield rose from 6.93% to 7.21% year-on-year. Scotland recorded the highest average yield at 8.62%, and England saw the largest annual uplift, with yields at about 7.04%.

A more professional market

Lending to portfolio landlords (those with four or more mortgaged rental properties) grew faster than to smaller landlords - portfolio lending rose 10.7% to £3.2 billion, while lending to non-portfolio landlords increased 5.5% to £7.7 billion. Arrears also improved, with the number of buy-to-let mortgages in arrears falling 24.3% to 8,960.

What this means

The buy-to-let market looks more mature than it did a decade ago. Rather than a rush to expand, many investors are consolidating, fixing costs and benefiting from improving yields and lower arrears. For landlords considering their next move, this environment suggests reviewing remortgage options, thinking about rate certainty and focusing on long-term returns.