The UK’s Buy to Let (BTL) mortgage market remained broadly stable between April and June this year, with landlords benefitting from easing mortgage rates and strong tenant demand.
The number of Buy to Let mortgages advanced in the second three months of the year stood at 49,590 according to banking trade body UK Finance’s latest insight, down just 2.6% compared with the same period last year.
The combined value of these mortgages was £8.8 billion, down 0.2% on the same quarter in 2024.
There were 1.47m Buy to Let mortgages outstanding at the end of June, an increase of 5.5% on the previous year.
Mortgage rates lower than last year
The average interest rate on new Buy to Let mortgages stood at 5% between April and June 2025, UK Finance said. Although this is up 2 basis points from the previous quarter, it is 19 basis points lower than in the same period last year.
Meanwhile, the average gross rental yield across the UK rose marginally to 7.26% in the second three months of the year, up from 6.9% a year earlier, suggesting stable returns for landlords.
Given current political and economic uncertainty and with the Budget looming in November, growing numbers of landlords are opting for the security of fixed rate mortgage deals, which can provide valuable budgeting certainty.
There were 1.47 million Buy to Let loans locked in at fixed rates between April and June 2025, a 5% increase compared to the previous year. In contrast, variable-rate loans saw a sharp drop, falling by 18% to just 463,000.
Landlords are also benefiting from growing numbers of lenders offering mortgages to those using limited company structures. Borrowing via a limited company has surged in popularity since mortgage interest relief restrictions came into full effect in April 2020. These mean that individual landlords can only reclaim this relief at the basic rate, whatever rate of tax they pay. Landlords who hold their properties in a limited company, however, can offset 100% of mortgage interest against their profits.
There are several factors to consider for landlords wanting to hold rental properties within a limited company, so if you’re considering taking this route, it’s essential to seek professional advice first.
