The number of new UK buy-to-let loans was £11.2 billion in Q1, according to UK Finance, up 18.2% by number and 21.3% by value year-on-year.

The trade body said the growth was largely concentrated in remortgage activity.

The average gross buy-to-let rental yield for the UK in Q4 2025 was 7.18%, compared with 6.99% in the same quarter in the previous year.

The number of buy-to-let fixed-rate mortgages outstanding in Q4 2025 was 1.46 million, 2% up on a year previously.

By contrast, the number of variable rate loans outstanding fell by a further 9.8% to 466,000.

The average interest rate across all new buy-to-let loans in the UK was 4.77% in Q4 2025.

This was eight basis points lower than in the previous quarter, and 32 basis points lower than in the same quarter of 2024, UK Finance said.

Reflecting the downwards movement in interest rates, the average buy-to-let interest cover ratio (ICR) for the UK in Q4 2025 was 218%, up from 201% in Q4 2024 and 215% in the previous quarter.

At the end of Q4 2025 there were 9,520 buy-to-let mortgages in arrears greater than 2.5% of the outstanding balance. This was down 910 from the previous quarter.

There were 770 buy-to-let mortgage possessions taken in Q4 2025, up 10% from 700 in the same quarter a year previously.

UK Finance head of analytics James Tatch said: “Investors took advantage of falling interest rates to refinance their borrowing, although instability in the mortgage market in recent weeks has pushed up borrowing costs, which may well dampen the growth of buy-to-let remortgaging somewhat.

“However, a combination of the regulatory and tax measures already in place, combined with the measures in the Renters’ Rights Bill, which will come into force next month, are likely to continue to weigh down on new demand activity. We expect a broadly flat picture for buy-to-let purchase lending this year, compared to levels seen a year ago.”