Landlord borrowing has been increasing in line with the wider mortgage recovery, with new figures showing investment in the sector increasing as the first phase of the Renters’ Rights Act is about to be implemented.
The latest market analysis from Alexander Hall shows buy-to-let mortgage lending has grown at an average quarterly rate of 7% over the last year, matching the pace recorded across both first-time buyers and home movers, as improving mortgage market conditions continue to support demand for rental property borrowing.
The brokerage firm analysed historic Bank of England data on quarterly gross mortgage advances by purpose of loan to examine how activity has evolved across each buyer segment as the wider mortgage market stabilised.
£6.6bn lent to the buy-to-let sector
In the latest available quarter (Q3 last year), £6.6bn was lent to the buy-to-let sector. While buy-to-let mortgages remain the smallest segment of the mortgage market, accounting for 8.2% of total lending, the total represents a 22% increase on the previous quarter and a 26% increase when compared with Q3 2024.
Alexander Hall found that average quarterly growth over the last year is now identical for buy-to-let, first-time buyers and home movers at 7%. Only remortgaging activity recorded stronger growth, with an average quarterly increase of 12%, as a result of heightened refinancing activity as borrowers respond to improving rates and affordability.
Together, the figures suggest that despite regulatory change and the headlines around landlord exoduses, borrowing demand remains robust.
buy-to-let lending rising by 28%
And that picture is reinforced by UK Finance data for the same period, which shows the value of new buy-to-let lending rising by 28% year-on-year, while the number of new buy-to-let loans issued increased by 23%.
The Intermediary Mortgage Lenders Association expects mortgage lending activity to continue growing throughout 2026 and 2027 as interest rates ease, affordability improves and lending conditions ease.
Richard Merrett, Managing Director of Alexander Hall, says the data challenges the narrative of a large-scale landlord retreat.
No sign of a landlord exodus
“While some amateur landlords may have chosen to exit the sector following a string of Government regulatory changes designed to dent portfolio profitability, the idea of a widespread landlord exodus simply isn’t reflected in the lending data.
“In fact, our analysis shows that buy-to-let lending has been growing at the same pace as both first-time buyer and home mover activity over the last year, which underlines that investor appetites remain very much alive.
“Of course, there have been some notable improvements to the mortgage landscape which will have helped to fuel the fire, with lower rates, greater product availability, and more favourable monthly repayments all helping to support landlord margins and reinforce buy-to-let’s position as one of the more stable long-term investment options available.
“As confidence continues to return across the mortgage market, we expect this momentum to carry forward into 2026 as the buy-to-let sector continues to defy the narrative that landlords are calling time and looking to exit.”
