The UK's buy-to-let market has experienced a surge in activity at the start of 2026, with a staggering £10.8 billion worth of new loans secured by landlords over the first three months. A total of 58,272 new loans were issued, marking a significant increase on the same period last year.
Despite overall borrowing costs remaining higher than in 2025, average interest rates for buy-to-let properties dipped to 4.71% - a six basis point decrease from the previous quarter and 29 basis points lower than at this time last year. This subtle drop in rates played a key role in boosting the average interest cover ratio to 221%, indicating improved affordability for landlords.
Fixed-rate mortgage deals continued to gain traction among landlords, with their proportion of outstanding mortgages growing year-on-year. Fixed-rate loans rose by 1.4% to 1.47 million, while variable-rate loans saw a decline of 9.5% to 453,000 - underscoring the preference for financial certainty in uncertain market conditions.
The data also reveals a reduction in mortgage arrears, with 8,960 buy-to-let mortgages exceeding 2.5% of the outstanding balance by the end of March 2026 - down from 9,520 in the previous quarter. The number of properties repossessed by lenders remained stable at 810 during the period.
Industry experts believe that while lending may have slowed slightly from the heady levels seen towards the close of last year, the sustained activity in the first quarter of 2026 suggests a market on the upswing. Remortgaging continued to drive lending, with landlords actively refinancing to manage portfolios and support long-term investment plans.