Landlords have borrowed £6.6bn in clear sign they have not been put off by the looming Renters' Rights Act.
Buy-to-let mortgage borrowing continues to grow, with fresh lending figures indicating landlords are still investing in rental property despite regulatory change and headlines around landlord exits, according to Alexander Hall’s Managing Director Richard Merrett.
The brokerage firm’s latest market analysis, which is based on historic Bank of England data, shows buy-to-let lending has grown at an average quarterly rate of 7% over the last year.
Towards the end of last year (Q3), £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 represented a 22% increase on the previous quarter and a 26% increase compared with Q3 2024.
UK Finance figures from the same period show the value of new buy-to-let lending has risen by 28% year-on-year, while the number of new buy-to-let loans issued increased by 23%.
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.
Merrett said “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.”
Buy to Let is still popular with High Net Worth Individuals
A wealth and investment management company says wealthy UK investors are pivoting to buy to let.
Research by Rathbones reveals many investors are willing to embrace complexity and risk, in turn for higher returns, despite legislative uncertainty.
The Renters’ Rights Act, Making Tax Digital, and selective licensing are just a few of the challenges landlords now face.
Investment in BTL rises sharply
According to data from 3,092 UK adults with investable assets of up to £2.5 million, investment behaviour changes markedly once tax-efficient savings options are exhausted, with wealthier investors far more likely to pursue complex and higher-risk investments.
Investment in buy to let rises sharply with wealth, from just 4% among investors with £25,000–£250,000 of investable assets to 35% among those with more than £2.5 million.
Isabella Galliers-Pratt, senior investment director at Rathbones, said “as wealth increases, investors are more willing and able to take on higher levels of risk. Greater financial resilience gives them the confidence to explore opportunities beyond mainstream wrappers.
The right route depends on time horizon, risk tolerance and personal tax circumstances.”
However, Rathbones warns that while buy-to-let remains popular, its appeal has diminished.
According to Rathbones’ analysis, house prices have barely kept pace with inflation since 2016, while tax and regulatory changes, along with higher borrowing costs, have eroded returns. As a result, many buy-to-let investments are now less attractive on a risk-adjusted basis, particularly when leverage is used.
House prices remain modest despite an uplift in sales numbers
The average house price in the UK over the last three months was £269,000 according to Zoopla, indicating a rise of 1.3% over the past year; however, still down from 1.8% a year ago.
Despite this, the year has started with a big rebound in market activity compared to the sluggish run-up to the end of last year.
Primarily driven by the lowest mortgage rates the market has seen in four years, with an increased advance in mortgage access, particularly for first-time buyers, says Zoopla.
Data shows that the number of agreed sales surged massively, compared to the strong start to 2025, which was below by 3%. Sales are currently sitting at the fourth strongest February over the past decade, despite there being 8% fewer buyers.
What this means for the market
While many suggest that 2026 will be a strong year for the UK property market in terms of growth, Zoopla's report shows that buyers have more choice and that the increase in property supply would “keep house prices in check” in the next year.
The report would suggest there has been a big surge in sellers with continued confidence in the market, and that seems to be an improving pattern in the sector.
Additionally, 40% of UK homes were now cheaper to buy than they were to rent as a result of the lower mortgage rates and lenders giving more wiggle room to buyers.
Should you invest in UK buy-to-let property in 2026?
2026 is a good time to invest in UK property. The market is growing, and the cost of borrowing is falling at a much lower level than it was in past years. Combine that with forecasted growth, and this is a good time to buy UK property.