The latest figures are an increase of 6.5% by number (8.9% by value) compared to the same quarter in 2023.

Data found that the average gross BTL rental yield for the UK in Q3 last year was 6.93%, compared to 6.53% in Q3 2023.

The average interest rate across all new BTL loans in the UK was 5.22% in Q3 2024. This was 0.03 basis points higher than in the previous quarter, but 0.09 basis points lower than in the same quarter of 2023.

Reflecting the movements in interest rates, the average BTL interest cover ratio (ICR) for the UK in Q3 2024 was 195%, still up from 190% in Q1 2024, and 9 basis points higher than a year previously.

The number of BTL fixed rate mortgages outstanding in Q3 2024 was 1.4m, 3.3% up on a year previously.

In contrast, the number of variable rate loans outstanding fell by 14.9% to 541,488.

At the end of Q3 2024 there were 13,000 BTL mortgages in arrears greater than 2.5% of the outstanding balance.

This was down 570 from the previous quarter but 19% higher than in the same quarter a year previously.

There were 710 BTL mortgage possessions taken in Q3 last year, which is unchanged from the previous quarter, but an increase of 73.2% on the same quarter a year previously.

While Q3 figures aren’t as strong as Q2, which saw a surge of 26% in BTL business compared to Q3’s 6.5% rise, Phoebus Software chief of sales and marketing Richard Pike says it “still shows a strong, confident BTL market”.

“In December, UK Finance’s annual BTL report predicted a 7% drop in mortgage lending for buy-to-let purchases in 2025 compared to 2024, which was mainly due to the latest in a string of tax and regulatory blows dealt to landlords over recent years – this time on stamp duty in the Autumn Budget.”

“However, if all goes according to market predictions, interest rates and mortgage rates should drop in 2025, which should encourage many landlords – particularly professional portfolio landlords – to maintain hold of their properties. Despite recent challenges, the buy-to-let market is still a high yield investment.”

Meanwhile, Black & White Bridging director of lending Oli Bland says the latest figures “paint a mixed picture of the BTL market”.

“New loans rose by 6.5% year-on-year, and average rental yields increased to 6.93%, reflecting pockets of opportunity for landlords who can navigate the challenges.”

“The North continues to attract investors with its lower entry costs and higher returns, while the growth in fixed-rate mortgages—up 3.3% on the year—shows a shift towards greater stability amidst ongoing economic uncertainty.”

“However, the rise in arrears and possessions highlights the pressures many landlords are facing, with increasing costs and policy changes squeezing profitability.”

“While the decline in arrears compared to the previous quarter is a positive sign, it’s clear that the sector remains under strain. For landlords who are prepared to adapt, there are still viable opportunities, but the overall environment requires careful planning and a long-term perspective.”