THE PROPERTY FILTER TAKE
Buy-to-let lending rose 20.6% year-on-year to 58,051 loans worth £10.7 billion in the second quarter of 2026, but UK Finance says last year's figures were artificially low.
Remortgages made up 39,631 of those loans, so landlords refinancing HMO or multi-let stock off an expiring fix sit in the busiest part of the market.
Check your licence, your fixed-rate end date and your current rents, and consider asking your broker where your interest cover sits before your deal ends.
Buy-to-let lending rose 20.6% year-on-year in the second quarter of 2026, with 58,051 new loans worth £10.7 billion, according to UK Finance data reported by PropertyWire on 22 October 2026. Loan values rose 25% on the same quarter of 2025. But UK Finance itself warns that the comparison flatters the market, because activity a year earlier was unusually weak.
How much of the 20.6% rise is real growth?
James Tatch, Head of Analytics at UK Finance, flagged the issue himself (PropertyWire, 22 October 2026). "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, making the year-on-year increases look particularly strong."
According to PropertyWire, the 2025 figures were suppressed by a rush of completions in the first quarter of that year, ahead of stamp duty changes. Property118 reports the same effect: BTL (buy-to-let) borrowers brought their transactions forward, which left the second quarter of 2025 quiet.
So the fairer test is quarter-on-quarter (against the previous three months). Against the first quarter of 2026, remortgages rose by 470 loans while purchase lending fell by 845 loans (PropertyWire). Tatch told Property118: "Compared with Q1 this year, the market appears more stable, with remortgaging edging up while lending for new purchases eased slightly."
Year-on-year, purchase lending still rose 23% to 16,026 loans, and 27.9% by value, according to Property118. House purchase loans were worth £2.7 billion, with £500m for other lending, Mortgage Solutions reports.
Why are remortgages carrying the market?
Remortgages (switching an existing mortgage to a new deal) accounted for 39,631 of the 58,051 new loans. That was up 17.6% by volume and 20.2% by value on a year earlier (UK Finance, via PropertyWire). By my arithmetic, that is just over two-thirds of all new loans by number.
PropertyWire links the activity to landlords refinancing as fixed-rate deals expired. Property118 reports that UK Finance said the large number of expiring fixes contributed to the rise in remortgaging.
The wave has further to run. Louisa Sedgwick, managing director of mortgages at Paragon Bank, was quoted by Mortgage Solutions. "We expect that trend to continue throughout the rest of this year and into 2027 as five-year loans written during the buoyant market of 2021 and 2022 mature."
That matters if you hold HMO (house in multiple occupation, a property let to several unrelated tenants who share facilities) stock on a five-year fix from that window. These UK Finance figures are UK-wide and include no HMO breakdown. They show the direction of the market, not how a lender will view your particular multi-let. Before a refinance, you can test a commercial valuation figure with our free HMO valuation calculator.
What do rates, cover and yields look like now?
The average interest rate on new BTL loans was 4.82% in the second quarter of 2026 (UK Finance, via PropertyWire). That is up 12 basis points (0.12 of a percentage point) on the previous quarter, but 18 basis points lower than a year earlier. Tatch told Property118: "Looking ahead, higher borrowing costs are likely weighing down on buy-to-let demand, underpinning flatter lending growth across 2026."
The average ICR (interest cover ratio, rent as a percentage of the mortgage interest) was 217%, according to Mortgage Solutions. That is up from 210% in the second quarter of 2025 but down from 221% in the previous quarter. UK Finance said this reflected interest rate movement. To see how your own rents compare with a lender's cover test, our free BTL stress test calculator runs the ICR sums.
Average gross rental yields (annual rent as a percentage of property value) held at 7.27%, against 7.26% a year earlier (PropertyWire). Fixed-rate BTL mortgages outstanding fell 0.7% on the year to 1.46 million. Variable-rate loans outstanding fell 3% to 450,000 (Mortgage Solutions).
Are arrears and possessions still falling?
Yes, on both comparisons. UK Finance's Mortgage Arrears and Possessions Update for Q2 2026, released on 13 August 2026, counted 8,390 BTL mortgages in arrears of 2.5% or more of the outstanding balance. That is 6% fewer than in the previous quarter and about 26% fewer than a year earlier (25.6% in PropertyWire's report).
Possessions (properties taken back by the lender) fell to 630 in the quarter. That is 22% down on the previous quarter and 20% down on a year earlier, or 20.3% in PropertyWire's report. BTL mortgages in arrears made up 0.44% of all BTL mortgages outstanding, the same UK Finance update shows.
These arrears and possessions figures cover the UK as a whole, with no breakdown for English regions or individual nations, UK Finance notes. Its next update is due on 12 November 2026.
What should HMO landlords check before refinancing?
Kim Lidbury, President of ARLA Propertymark, called the increase "extremely encouraging", PropertyWire reports. She noted uncertainty around borrowing costs and affordability, alongside the Renters' Rights Act in England and the Housing (Scotland) Act. "Maintaining access to competitive finance will be crucial in supporting responsible investment ... encouraging continued investment in the homes needed by tenants across the entire UK," Lidbury said.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented on the Act in Property118. "While the Renters' Rights Act was implemented during the period this data covers, it doesn't seem to have deterred landlords." For wider context on where BTL sits against other approaches, see our property investment strategies hub.
If your multi-let is coming off a fix, three checks are worth making before you speak to a broker. Check that your licence is current. Check your room rents against the cover test, since the average ICR slipped from 221% to 217% in a quarter. And check your fixed-rate end date, because Paragon Bank expects the remortgaging trend to continue into 2027.
None of this replaces advice on your own position. Our negotiation and finance guides cover broker, lender and mortgage topics in more depth.
Key takeaways
Buy-to-let lending rose 20.6% year-on-year to 58,051 loans worth £10.7 billion in the second quarter of 2026 (UK Finance).
UK Finance says activity a year earlier was artificially low, so the year-on-year growth looks stronger than the underlying market.
Remortgages made up 39,631 loans; against the first quarter of 2026, remortgages rose by 470 loans and purchase lending fell by 845.
BTL arrears fell to 8,390 (down 6% on the quarter) and possessions to 630 (down 22% on the quarter), per UK Finance's update of 13 August 2026.
The average BTL interest cover ratio was 217%, down from 221% the previous quarter, so landlords refinancing may wish to check their rents against lender tests.
Frequently asked questions
How much did buy-to-let lending rise in the second quarter of 2026?
Why is the year-on-year growth figure misleading?
Are buy-to-let arrears and possessions falling?
Does the data show anything specific about HMOs?
When is the next UK Finance arrears and possessions update?
