Buy-to-let remortgaging rose 11.1% year on year in the first quarter of 2026 while purchase lending fell 14.9%, as fresh UK Finance figures pointed to landlords refinancing existing stock rather than stepping up acquisitions.
The split matters because the wider market picture improved at the same time. Average buy-to-let rates fell to 4.71%, rental yields rose to 7.21% and arrears dropped by almost a quarter, yet landlords still pulled back on new purchases in many areas.
For landlords and investors, that is the real message from the latest update. Cheaper debt is helping clean up balance sheets and refinance older loans, but it is not yet strong enough to trigger a broad return to buying activity.
Remortgaging carries the market while purchases stay weak
UK Finance said 58,272 new buy-to-let loans were advanced in Q1, worth £10.8bn. Remortgage volumes reached 39,160, while purchase lending fell to 16,871 loans. England saw the sharpest pressure in purchase activity, with loan numbers down 18.7%, while London dropped 23.3%.
By contrast, Scotland recorded a 22.6% rise in purchase loans and Wales posted a 20.6% increase. That leaves a more selective market than the headline lending total first suggests. Landlords are still prepared to act where the numbers work, but they are far less willing to expand blindly in higher-cost or lower-margin areas.
This follows Residential Landlord’s recent coverage of remortgage competition heating up across buy-to-let lending, which showed lenders were becoming more willing to back landlords again. The latest UK Finance data suggests that borrower confidence is improving more slowly than lender appetite.
It also adds weight to Residential Landlord’s reporting on regional yield differences. Better rates and healthier cover ratios matter, but landlords still appear to be choosing locations and deal types much more carefully than they did in earlier lending cycles.
Yields improve but the buying mood is still cautious
The average interest cover ratio rose to 221% from 204% a year earlier, while fixed-rate mortgages remained dominant and arrears fell 24.3% to 8,960 cases. Gross yields across the UK increased from 6.93% to 7.21%, with Scotland at 8.62% and England at 7.04%.
That is a better operating backdrop than many landlords faced in 2024 and early 2025. But it does not wipe away the drag from tax, compliance and patchy local demand. The figures suggest many investors are using lower rates to strengthen portfolios they already hold, not to rush into fresh buying.
That may prove the more durable reading of the market. A refinancing-led recovery is still a recovery of sorts, but it is not the same thing as new supply coming in at scale. Until purchase lending turns more convincingly, the sector is likely to stay tight where demand is strongest.
The latest figures are set out in Mortgage Solutions’ report on the Q1 UK Finance buy-to-let market update.
Opinion
These numbers look better for existing landlords than for would-be buyers. Remortgaging is getting easier and yields are improving, but purchase lending still tells a cautious story. If ministers expect lower rates alone to rebuild rental supply, they may be looking at the wrong part of the data.
