The latest data shows that there was a 22.7% increase compared with the same quarter in the previous year.

It also found that the average gross BTL rental yield for the UK in Q3 2025 was 7.15 per cent, compared with 6.93 per cent in the same quarter in the previous year.

The average interest rate across all new BTL loans in the UK was 4.85% in Q3 2025.

This represented a decrease of 15 basis points than in the previous quarter, and 37 basis points lower than in Q3 2024.

Reflecting the downwards movement in interest rates, the average BTL interest cover ratio (ICR) for the UK in Q3 2025 was 215%, up from 195% in Q3 2024 and 210 in the previous quarter.

Meanwhile, the number of BTL fixed rate mortgages outstanding in Q3 2025 was 1.44 million, 2.3% up on a year previously.

In contrast, the number of variable rate loans outstanding fell by 9.7% to 488,000.

At the end of Q3 2025 there were 10,420 BTL mortgages in arrears greater than 2.5% of the outstanding balance, down 850 from Q2 2025.

The data also found that there were 900 BTL mortgage possessions taken in Q3 2025, up 28.6% from 700 in the same quarter a year previously.

Commenting on the figures, Paragon Bank managing director of mortgages Louisa Sedgwick says: “The marked uplift in the value and number of buy-to-let mortgages written compared to the previous quarter, and particularly the same period a year ago, demonstrates how landlords will invest in buy-to-let property when market conditions allow.”

“The third quarter saw strong levels of remortgage activity, the highest since the final quarter of 2022, partly driven by landlords releasing equity to fund new acquisition. This continued the trend from the first half of the year, which saw more equity withdrawn at remortgage for portfolio expansion than any other corresponding period since 2018.”

“Viewed in the context of the latest encouraging figures, and with rates forecast to continue to fall, we anticipate the momentum seen in both the purchase and remortgage markets to continue throughout 2026.”

Meanwhile, MT Finance director of mortgages Marylen Edwards comments: “This data provides a compelling snapshot of a market in strategic transition. While the industry prepares for the Renters’ Rights Bill changes which start to come into force from May 1st, professional landlords aren’t just surviving, they are recalibrating.”

“We are seeing an increased year-on-year surge in lending value, while the average interest rate for new BTL loans has eased to 4.85 per cent, down 37 basis points from a year ago. This softening is pushing the recalibration of portfolios as landlords lock in stability before the May 1st deadline.”

SPF Private Clients director Howard Levy adds: “Many smaller portfolio landlords who held in their own name have left the market which has paved the way for the larger buy-to-let investors to provide the stock for this still rising demand.”

“Looking at any specific quarter is slightly misleading as the various changes that occurred in 2024 with taxation, relief and the SDLT surcharge increase delivered in the October Budget of 2024 could have skewed the figures that quarter.”

“It will be interesting to see if the number of loans advanced reverts back next quarter as compared to Q1 2025.”

“For me the most interesting point is that the ICR coverage was 215%. This would potentially mean that rates were booked and fixed at a low point, that LTVs are low on average or rents have risen drastically.”

“In reality, it is probably a combination of all of these, but if rents do continue to rise to cover the extra costs that the government are requiring landlords to pay, then we can expect this figure to rise even further.”