There’s been a 38.6% increase in buy-to-let loans issued in the first quarter of 2025 year-on-year, the Buy-to-let Mortgage Market Update from UK Finance has revealed.
Average buy-to-let rates have dropped in that period, as they averaged at 4.99% in Q1 2025, down from 5.40% in the same quarter last year.
Nathan Emerson, chief executive at Propertymark, said: “It is positive to witness what we hope is a wider scale revival in buy-to-let lending across Q1 of 2025.
“This trend has likely been encouraged by interest rates on buy-to-let loans being lower than they were in the same quarter for 2024.
“These numbers demonstrate that more competitive interest rates are helping to attract more people to the buy-to-let market.”
The average gross buy-to-let rental yield for the UK rose to 6.94% in Q1 2025, up from 6.88% in the same quarter in the previous year.
Richard Donnell, executive director at Zoopla, said: “Activity from buy-to-let landlords is starting to increase as mortgage rates stabilise and yields from residential property move higher as rents rise faster than house prices.
“The big landlord sell off is coming to an end after a decade of tax changes and higher borrowing costs that saw many landlords reconsider their strategy and property holdings.
“As base rates start to fall, we are likely to see a continued increase in demand from landlords with a greater focus on strength and quality of cashflow rather than house prices inflation.”
On terms of negatives for landlords, there were 810 buy-to-let mortgage possessions in Q1 2025, up 28.6% on the same quarter a year previously.