btl21 October 20264 min

Is buy-to-let lending picking up again?

Buy-to-let lending grew in Q2 2026, according to UK Finance. For landlords on trackers, variable rates or deals coming to an end, the picture is more nuanced than the headline suggests.

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At a glance

Bank Rate3.75%Bank Rate is 3.75% (Bank of England, 17 September 2026).Source: Bank of England (opens in a new tab)
The last MPC vote6–3 to holdThe Bank of England's Monetary Policy Committee voted 6–3 to hold Bank Rate at 3.75%, with three members voting to raise it to 4% (Bank of England, 17 September 2026).Source: Bank of England (opens in a new tab)
Buy-to-let deposit20% to 25%Lenders on our panel typically ask for a buy-to-let deposit of 20% to 25% (indicative, checked October 2026; it depends on your circumstances).
Rental cover test125% or 145%Lenders on our panel typically test buy-to-let rental cover at 125% for a limited company or a basic-rate taxpayer and 145% for a higher- or additional-rate taxpayer, against a stress rate of around 5.5% (indicative, checked October 2026; it depends on your circumstances).
Landlord finance cost relief20%Individual landlords get relief for residential finance costs as a tax reduction at the basic rate, currently 20%, fully in place since 6 April 2020 (gov.uk, October 2026).Source: gov.uk (opens in a new tab)
Property income tax from April 202722% basic rateFrom 6 April 2027, property income is taxed at 22% at the basic rate, 42% at the higher rate and 47% at the additional rate under the Finance Act 2026, and relief for residential finance costs is given at the 22% property basic rate (gov.uk, October 2026).Source: legislation.gov.uk (Finance Act 2026 s7) and gov.uk (opens in a new tab)
Portfolio landlordFour or morePortfolio landlords are those with four or more mortgaged buy-to-let properties (Bank of England's Prudential Regulation Authority, September 2016).Source: Bank of England (opens in a new tab)

Published 21 October 2026. Figures correct as at this date.

UK Finance’s latest figures show buy-to-let lending rose in the second quarter of 2026, with remortgages making up the bulk of it (UK Finance, 21 October 2026). In other words, much of the activity is landlords moving existing loans rather than buying more property. What matters more is what’s driving it, and what it means for landlords at different stages of their mortgage.

What is behind the rise in buy-to-let lending?

Some landlords who held off while rates were rising have now started to move, either to a new fix or a different lender. Others are buying, though purchases make up a smaller share than remortgages. Stamp duty for additional properties is higher than it was, which shapes the sums on any new purchase.

It is also worth noting what the rise does not tell us. Volume recovery does not mean borrowing has become straightforward. Lenders on our panel typically ask for a buy-to-let deposit of 20% to 25% (indicative, checked October 2026; it depends on your circumstances), and rental cover tests remain demanding: lenders on our panel typically test at 125% for a limited company or a basic-rate taxpayer and 145% for a higher- or additional-rate taxpayer, against a stress rate of around 5.5% (indicative, checked October 2026; it depends on your circumstances).

Does the rate picture affect whether landlords should fix or stay on a tracker?

Bank Rate is 3.75% (Bank of England, 17 September 2026). The Monetary Policy Committee voted 6–3 to hold at the September 2026 meeting, with three members preferring a rise to 4% (Bank of England, 17 September 2026). The next Bank Rate decision is due on 5 November 2026 (Bank of England, October 2026).

That three-way split matters. A tracker or variable-rate mortgage passes any future rise straight through to the monthly payment — which reduces outgoings if rates fall, but increases them if rates rise. A fixed rate locks the payment and removes that uncertainty, though breaking a current deal early typically triggers an early repayment charge. Neither is obviously correct; it depends on your loan size, your rental margin and your appetite for payment variability.

How do the coming tax changes affect the calculation?

The rate environment is only part of the picture. Individual landlords currently receive relief for residential finance costs as a tax reduction at the basic rate, currently 20%, fully in place since 6 April 2020 (gov.uk, October 2026). From 6 April 2027, property income will be taxed at 22% at the basic rate, 42% at the higher rate and 47% at the additional rate under the Finance Act 2026, and relief for residential finance costs will be given at the 22% property basic rate (gov.uk, October 2026).

That shift changes the net cost of mortgage debt for many landlords, even if their gross rate stays the same. Speak to an accountant about how it lands in your specific case before April 2027.

Does this look different if you hold four or more properties?

Portfolio landlords — those with four or more mortgaged buy-to-let properties (Bank of England's Prudential Regulation Authority, September 2016) — face more detailed underwriting. Lenders assess the portfolio as a whole, not just the property being financed. That can mean more paperwork and longer timescales, but it also means a strong overall portfolio can support a case that might look marginal on one property alone.

The rise in lending volumes is a reasonable signal that the market is moving again. Whether it is the right moment for you depends on your structure, your tax position and your rate exposure — and those three things pull in different directions for different landlords.

For advice on your own buy-to-let mortgage, speak to a qualified, independent mortgage broker who can look at your circumstances in full. If you'd like to speak with Lawes Financial, get in touch directly.

Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.

Figures quoted are illustrative only. Your actual outcome will depend on your individual circumstances, loan size, term, and the products available to you.

This is not financial advice. Speak to an independent mortgage broker before making any decisions.

Lawes Financial Limited (FRN 1046161) is an appointed representative of Andrew Charles Consulting Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 304904).

Questions landlords ask

What deposit do I need for a buy-to-let mortgage?

Lenders on our panel typically ask for a buy-to-let deposit of 20% to 25% (indicative, checked October 2026; it depends on your circumstances). Some lenders will consider less, but the product range narrows considerably below that threshold.

How do lenders work out whether the rent covers the mortgage?

Lenders on our panel typically test buy-to-let rental cover at 125% for a limited company or a basic-rate taxpayer and 145% for a higher- or additional-rate taxpayer, against a stress rate of around 5.5% (indicative, checked October 2026; it depends on your circumstances). That means the rent needs to exceed the mortgage payment by a meaningful margin — not just cover it.

Are there tax changes coming that affect buy-to-let?

From 6 April 2027, property income is taxed at 22% at the basic rate, 42% at the higher rate and 47% at the additional rate under the Finance Act 2026, and relief for residential finance costs is given at the 22% property basic rate (gov.uk, October 2026). If you hold properties personally, it is worth speaking to an accountant before April 2027 to understand the impact on your position.

What counts as a portfolio landlord, and does it change how I'm assessed?

Portfolio landlords are those with four or more mortgaged buy-to-let properties (Bank of England's Prudential Regulation Authority, September 2016). Lenders assess portfolio landlords differently — typically looking across the whole portfolio rather than property by property — so the underwriting process can take longer and require more documentation.