Buy-to-Let Lending Surges 28% as Lenders Compete Aggressively for Landlord Business

While headlines in the private rented sector have been dominated by regulatory change — the Renters' Rights Act, EPC deadlines, and rising tax burdens — a quieter but significant shift is taking place in the mortgage market. Buy-to-let lending is growing at its fastest pace in years, and lenders are actively competing for landlord business with rate cuts, relaxed criteria, and new product innovations. For experienced investors who know how to read the market, this is a signal worth acting on.

The Numbers: A Market Re-Awakening

Data from UK Finance for Q3 2025 shows the value of new buy-to-let mortgage lending rising 28% year-on-year, while the number of new loans issued climbed 23% over the same period. Alexander Hall reported that £6.6 billion was advanced to BTL borrowers in Q3 2025 alone — a 26% increase on Q3 2024 and 22% higher than the previous quarter. Buy-to-let now accounts for 8.2% of total mortgage lending across the market, and that share is growing. The Intermediary Mortgage Lenders Association forecasts lending will continue expanding throughout 2026 and into 2027, supported by easing interest rates and improving affordability conditions.

These are not modest upticks. A 28% annual increase in lending value represents a genuine re-engagement from both lenders and borrowers with the buy-to-let sector — a market that had been widely written off in the post-pandemic, post-rate-rise environment. The data suggests that professional landlords never left; they simply paused while the rate environment was hostile. Now, with rates on a downward trajectory, they are returning — and lenders are rolling out the welcome mat.

What the Lenders Are Doing

The competitive dynamic in the BTL mortgage market has shifted markedly since the start of 2026. The Mortgage Works cut buy-to-let rates by up to 0.2%, with one-year fixed deals now available at 2.29% up to 75% loan-to-value — a rate that would have seemed optimistic just eighteen months ago. TSB reduced two- and five-year fixed rates by up to 0.35%, bringing two-year purchase products to 3.79%. Shawbrook Bank trimmed specialist BTL rates by up to 0.5%, as did Saffron across its Expat and HMO product ranges.

Beyond headline rate cuts, lenders are innovating in ways that directly benefit landlords improving or expanding their portfolios. Coventry for Intermediaries introduced a product range that rewards landlords with EPC A, B, or C-rated properties with preferential rates — a meaningful incentive for those already investing in energy upgrades ahead of the 2030 deadline. Paragon Bank launched two-year Bank Base Rate tracker products starting at 5.1% with no early repayment charges, providing flexibility for investors who expect rates to fall further. Aldermore entered the market with zero-fee limited edition products at 5.39% (two-year) and 5.22% (five-year) up to 75% LTV, reducing the upfront cost of remortgaging or acquiring.

Expanding Criteria: Who Can Borrow Now

Rate cuts are one thing, but changes to lending criteria matter equally for portfolio expansion. Accord Mortgages has relaxed its rules for first-time landlords, now requiring only £75,000 in household income to access top-slicing — the mechanism that allows personal income to bridge any shortfall between rental income and the mortgage stress test. The same lender also reduced the income threshold for experienced landlords using top-slicing from £50,000 to £40,000. These adjustments meaningfully widen the pool of investors who can qualify for financing on properties where rental yields alone might not pass standard stress tests.

This matters particularly for investors targeting higher-value properties in city centre locations, where yields tend to be compressed but capital appreciation prospects are stronger. With top-slicing now available at lower income thresholds, the mathematics of acquisition shift in favour of the borrower. Foundation has also launched specialist products for first-time buyers entering the landlord market, with fixed rates from 5.84% up to 75% LTV — recognising that a new wave of investor entrants is forming as the affordability of residential homeownership remains stretched.

What This Means for Property Investors

The combined effect of rising lending volumes, competitive rate cutting, and expanding criteria creates a window of opportunity for investors who are positioned to move. Refinancing existing portfolio properties at materially lower rates improves monthly cash flow immediately — and in a market where rental yields have been squeezed by high mortgage costs, that improvement can be the difference between a property that works and one that doesn't. For those considering acquisitions, the combination of a 23% increase in loan availability and sub-4% products across several lenders means that deal structuring has become considerably more flexible than at any point in the last two years.

There is also a strategic dimension here. Lenders competing for BTL business typically indicates that they see the landlord market as commercially sound — not the retreating, shrinking sector that media coverage of the Renters' Rights Act might suggest. Professional operators with clean credit histories, well-maintained portfolios, and energy-efficient properties are precisely the borrowers lenders want to attract. If your portfolio meets those criteria, the mortgage market in February 2026 is among the most landlord-friendly it has been since before the Bank of England rate-hiking cycle began.

The message for active investors is straightforward: review your existing mortgage maturities, engage your broker on the current product landscape, and model the impact of rate reductions on portfolio-level cash flow. A market that is moving in your direction this quickly will not stay static for long — and the lenders pricing most aggressively today may not be doing so in six months. At Quiddity Group, we work with investors at every stage of portfolio growth, from initial acquisitions to complex refinancing and title-splitting structures. If you would like to understand how the current mortgage landscape applies to your specific position, get in touch with our team.