Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.
BTL Remortgages Surge While Property Purchases Decline
Buy-to-let (BTL) remortgages increased by 11.1% year-on-year to 39,160 in Q1 2026, according to UK Finance. In contrast, the number of BTL loans for house purchase fell by 14.9% to 16,871 over the same period.
The rise in remortgaging activity coincided with a drop in interest rates, which fell by 29 basis points compared to the previous year and by 6 basis points from the previous quarter. The average interest rate across all BTL loans stood at 4.71% in Q1 2026.
Regional Trends in BTL Lending
Across the UK, there were 58,272 new BTL loans advanced in Q1 2026, with a total value of £10.8bn, representing a 7.02% increase by value. England saw the largest fall in new BTL house purchase lending, with an 18% year-on-year decrease in value to £2.537m and an 18.7% drop in the number of loans to 14,322. London experienced a 23.3% fall in purchase volumes.
In contrast, Wales recorded an 18.5% year-on-year increase in the value of new BTL lending to £86m, with the number of loans rising by 20.6% to 753. Scotland saw a 22.6% increase in house purchase loans to 1,365.
Fixed Rate Mortgages Preferred
At the end of Q1 2026, there were 1.466 million fixed rate BTL mortgages outstanding, up 1.4% year-on-year. Variable-rate mortgages declined by 9.5% to 453,000.
Rental Yields and Mortgage Health Improve
The average gross BTL rental yield in the UK rose to 7.21% in Q1 2026, up from 6.93% a year earlier. Scotland had the highest yield at 8.62%, while England saw the largest rise in yield to 7.04%.
BTL mortgage arrears fell by 24.3% year-on-year, with 8,960 mortgages in arrears. Lending to non-portfolio landlords (those with 1-3 mortgaged rental properties) reached £7.7bn, a 5.5% increase year-on-year.
Source: Mortgage Solutions