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

There were 59,467 new buy-to-let (BTL) loans advanced in the UK worth £10.9 billion in the third quarter of 2025, UK Finance data reveals.

The latest data shows that there was a 22.7% rise 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%, compared with 6.93% 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 decline 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 dropped 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 This continued the trend from the first half of the year, which saw more equity withdrawn at remortgage for portfolio expansion than any other corresponding period since 2018, she said.

She added: 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.