BTL lending hit £11.2bn in the fourth quarter of 2025, with UK Finance’s market update revealing a 21% increase from the same point in 2024.
During this period, 59,489 new BTL loans were written in the UK, representing an 18% increase in number since the year before.
The average gross BTL rental yield for the UK in Q4 2025 was 7.18%, compared with 6.99% in the same quarter in the previous year.
At the end of the year, there were 9,520 BTL mortgages in arrears greater than 2.5% of the outstanding balance. This was down 910 from the previous quarter.
There were 770 BTL mortgage possessions taken in Q4 2025, up 10% from 700 in the same quarter a year previously.
This data is proof of the sector’s resilience for some in the industry, and inspired confidence in the state of the UK’s BTL market.
“The data shows a clear pickup in activity, with both lending volumes and values up materially in the same quarter in the previous year,” said Louisa Sedgwick, managing director of mortgages at Paragon Bank.
“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.”
Raheel Butt, head of underwriting (BTL) at MT Finance, added: “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.”
