There have been 49,590 new buy-to-let (BTL) mortgages issued within the UK in Q2 2025, with a complete worth of £8.8bn, in line with new figures from UK Finance.
The variety of loans was down 2.6% year-on-year, whereas complete lending worth dipped marginally by 0.2%, indicating relative stability within the BTL market.
Based on the newest knowledge, the common gross rental yield rose to 7.26% throughout the quarter, up from 6.9% a 12 months earlier. In the meantime, the typical rate of interest throughout all new BTL loans was 5% – barely greater than the earlier quarter (up 2 foundation factors), however down 19 foundation factors year-on-year.
As charges eased, the typical curiosity cowl ratio (ICR)—a measure of rental earnings relative to mortgage curiosity—improved to 210%, up from 192% in Q2 2024 and 201% within the earlier quarter.
There have been 1.47 million BTL fixed-rate mortgages excellent on the finish of the quarter, an annual improve of 5.5%. Variable-rate loans, against this, declined 18% to 463,000.
Arrears additionally confirmed indicators of enchancment. The variety of BTL mortgages in arrears larger than 2.5% of the steadiness fell to 11,270—down 560 in comparison with Q1.
Nonetheless, possessions had been up. There have been 790 BTL mortgage possessions in Q2 2025, an 11.3% improve on the identical quarter final 12 months.
