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Purchase-to-let lending elevated by 22.7% year-on-year in Q3 2025 by way of quantity, UK Finance knowledge discovered.
In all, 59,467 buy-to-let loans have been issued, amounting to £10.9 billion.
Profitability has improved for landlords, as the common gross buy-to-let let rental yield was at 7.15% in Q3, rising from 6.93% the identical quarter final yr.
Howard Levy, director of mortgage dealer SPF Personal Shoppers, stated: “Many smaller portfolio landlords who held in their very own title have left the market which has paved the way in which for the bigger buy-to-let traders to offer the inventory for this nonetheless rising demand.
“Taking a look at any particular quarter is barely deceptive as the varied modifications that occurred in 2024 with taxation, reduction and the SDLT surcharge improve delivered within the October Price range of 2024 might have skewed the figures that quarter.
“Will probably be attention-grabbing to see if the variety of loans superior reverts again subsequent quarter as in comparison with Q1 2025.”
The everyday buy-to-let rate of interest was 4.85% in Q3 2025, down from 5.00% in Q2 2025.
In the meantime the common buy-to-let curiosity cowl ratio (ICR) was 215% in Q3 2025, up from 195% in Q3 2024 and 210 from the earlier quarter.
Levy added: “For me essentially the most attention-grabbing level is that the ICR protection was 215%. This could doubtlessly imply that charges have been booked and glued at a low level, that LTVs are low on common or rents have risen drastically.
“In actuality, it’s most likely a mix of all of those, but when rents do proceed to rise to cowl the additional prices that the federal government are requiring landlords to pay, then we will count on this determine to rise even additional.”
Possessions numbers worsened, as there have been 900 buy-to-let mortgage possessions in Q3 2025, up from 700 in Q3 2024.
Marylen Edwards, director of mortgages at specialist lender MT Finance, stated: “Regardless of the headwinds of 2025’s fee surroundings, it’s clear the sector continues to be actively transacting and enterprise continues to develop.
“The Q3 knowledge reveals a definitive flight to high quality, the place equity-rich, skilled traders are capitalising to strengthen and diversify their portfolios. New landlords coming into the market are longer-term strategic capital positive factors and the power to uplift and develop a portfolio.”
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