There were 49,590 new buy-to-let (BTL) mortgages issued in the UK in Q2 2025, with a total value of £8.8bn, according to new figures from UK Finance.
The number of loans was down 2.6% year-on-year, while total lending value dipped marginally by 0.2%, indicating relative stability in the BTL market.
According to the latest data, the average gross rental yield rose to 7.26% during the quarter, up from 6.9% a year earlier. Meanwhile, the average interest rate across all new BTL loans was 5% – slightly higher than the previous quarter (up 2 basis points), but down 19 basis points year-on-year.
As rates eased, the average interest cover ratio (ICR)—a measure of rental income relative to mortgage interest—improved to 210%, up from 192% in Q2 2024 and 201% in the previous quarter.
There were 1.47 million BTL fixed-rate mortgages outstanding at the end of the quarter, an annual increase of 5.5%. Variable-rate loans, by contrast, declined 18% to 463,000.
Arrears also showed signs of improvement. The number of BTL mortgages in arrears greater than 2.5% of the balance fell to 11,270—down 560 compared to Q1.
However, possessions were up. There were 790 BTL mortgage possessions in Q2 2025, an 11.3% increase on the same quarter last year.
