Remortgaging for buy-to-let is up, but new buy mortgages are down 

What the buy-to-let mortgage numbers tell us…

By Tom Entwistle, LandlordZONE

Two industry reports published within a day of each other this last week, at first sight, seemed to tell conflicting stories about buy-to-let financing. One reported that landlord purchase activity had dived, while the other said that landlords are still buying despite a fresh tax squeeze. 

Then, on Thursday, the Bank of England raised the Bank Rate from 3.75 to 4 per cent with an almost unanimous vote by the Monetary Policy Committee (MPC). Read the reports carefully, and there’s no conflict. They describe accurately a market that is refinancing to stand still, with a steadily shrinking group of small-scale landlords still willing to buy.

The Monetary Policy Committee voted by eight to one to raise the Bank Rate by a quarter of a point to 4 per cent. Just one member, Catherine Mann, suggesting a full half-point rise to 4.25 per cent. This comes as the first increase since August 2023. 

The Bank had little choice but to raise rates given that it predicts inflation, which measures the pace of price rises over time, is set to peak next year at 4.9 per cent, though it could reach even higher if the economy, both domestic and global, gets worse.

For those landlords with mortgages who are weighing up whether to refinance, hold, sell or buy more, it is worth considering their options and what the mortgage data reveals.

This article is for general information only and does not constitute financial, tax or legal advice. Landlords should take independent professional advice for their own circumstances.

What the search data show

The first report came from Twenty7tec. These software mortgage advisers are used to source mortgage products. This provider of technology and data solutions gives an October snapshot which recorded 273,330 buy-to-let searches. That’s down 7 per cent both for the month and for the year. 

Within that data lies the story that buy-to-let purchase searches were down by 25 per cent compared to October 2025, while buy-to-let remortgage searches were 2 per cent up.

The figure that stands out is the 37 per cent annual jump in residential remortgage searches. They’re up to more than 820,000. But the more telling comparison is for landlords versus domestic. Homeowners are remortgaging in large numbers while landlords, on the same measure, were barely remortgaging any more than a year ago. And they are performing searches for purchase finance far less.

One must be cautious when searches by advisers are reported on. They are not mortgage applications or completions. A single landlord’s case can generate several searches, and if mortgage product transfers are arranged directly with an existing lender, they may not appear in the figures at all. The data is a useful early indicator of direction of travel, but it doesn't count actual loans.

What the landlord survey shows

The second report was the latest quarterly survey from specialist lender Landbay. It covers more than 2,000 landlords, and its headline finding is that 34 per cent of landlords intend to buy at least one more property in the next 12 months. 

That’s broadly unchanged from the 35 per cent predicted in the previous quarter. Interestingly, the share of landlords who are confident about their own letting business, according to Landbay, rose from 22 per cent to 28 per cent.

Less prominent in the coverage was a second significant figure. 56 per cent of the Landbay respondents said they had no plans to buy; that’s up from 52 per cent in their previous survey. Significantly, the proportion ruling out purchases is therefore rising, not falling. 

The survey also found that 38 per cent of landlords expect to take a new product with their existing lender when their current deal ends. A further 21 per cent said they plan to move lenders, with a further quarter still undecided.

These points matter. First, Landbay had acknowledged that its survey responses were received before the budget, and they were also gathered before this week’s interest rate rise. 

Secondly, a specialist lender’s survey like the Landbay one will naturally lean towards established landlords, often those portfolio landlords investing within a company who are still actively intending to expand. They are borrowing. Those who have already sold are no longer in the sample. 

The third point to make is that Landbay has a legitimate commercial interest in the refinancing opportunity that itself describes. None of that makes their findings wrong, but it does mean they reflect the intentions of landlords who have already chosen to stay, rather than the sector as a whole. 

Another comment in the trade press that landlords moving to trackers are positioning themselves for further rate cuts has somewhat been overtaken by events.

What’s the hard evidence

The best guide to what landlords are really doing is completed lending figures reported quarterly by UK Finance. Searches and surveys measure intentions, a useful guide, but intentions don’t always materialise. 

In the second quarter of 2026, lenders advanced 58,051 new buy-to-let loans worth £10.7 billion, that’s up 20.6 per cent by number and 25 per cent by value on a year earlier. On the face of that information, the market is strong. 

Dig a bit deeper, and the picture is not as clear-cut. Remortgages accounted for £7.5 billion of that £10.7 billion and 39,631 of the 58,051 loans, roughly two-thirds by number. House purchase lending came to just £2.7 billion. In the first quarter the pattern was the same. Buy-to-let remortgages rose 11.1 per cent year on year to 39,160, while purchase loans fell 14 per cent to 16,871.

UK Finance’s head of analytics, James Tatch, has said the growth figures should be “viewed in context” because last year’s weak quarter flattered the comparison. He expected higher borrowing costs to keep lending growth flatter through 2026. 

Broker data points in the same direction. At specialist broker Commercial Trust, purchases fell from 29.8 per cent of buy-to-let applications in the second quarter of 2025 to 24.2 per cent a year later. Remortgages rose from 44.1 per cent to 56 per cent. 

Interestingly, those landlords who are still buying are borrowing more per property, and increasingly in cheaper, higher-yielding northern markets. Yorkshire and the Humber’s share of the broker’s purchase applications has almost quadrupled.

Other sentiment reporting

There are other surveys that paint a gloomier picture than Landbay’s. Property118’s third-quarter sentiment survey of 1,654 landlords finds that 37.1 per cent of landlords had seen their portfolio shrink through sales over the past two years. That’s against just 6.5 per cent who had grown their portfolio by buying. 

Pegasus Insight’s Landlord Trends research, which is drawn from NRLA members, has consistently found landlords more likely to sell than to buy, even as tenant demand has picked up.

All surveys have their own biases, and it’s only time that gives a full picture. Property118's survey respondents are self-selecting readers, and the site has its own commercial interests in the landlord market. 

So, each of these surveys broadly reflect the population it samples. That is precisely why the lending figures, which count real transactions, should be the anchor.

What does the rate rise change?

Thursday’s decision changes nothing until the landlord's deal is complete. Many landlords were anxious to secure new fixed-rate borrowing, as the rate rise was already priced in. Fixed rates follow swap rates. They move on expectations, and Moneyfacts data shows that average buy-to-let three-year fixes rose from 4.16 per cent to 5.54 per cent between February and this week. Some lenders argue the rise will not automatically push fixed rates higher. That’s because pricing depends more on wholesale funding markets rather than the Bank Rate itself.

Trackers and standard variable rates are a different matter, as these products' rates move straight away. That is very relevant to the minority of landlords in the Landbay survey who were moving towards trackers, up from 6 per cent to 10 per cent. 

The Bank of England’s own survey of market participants points to a further rise perhaps in December or February to 4.25 per cent, while it expects inflation to climb further.

A bigger constraint for many landlords is lenders' rental stress tests. Higher rates reduce the maximum loan any given rent will support. Hamptons found earlier in the year that landlords remortgaging were paying down debt at an average of £30,200 to get deals through; this was reducing a typical loan-to-value from about 62 per cent to 55 per cent. 

Remortgaging is more a defensive measure than a vote of confidence. It explains why refinancing dominates these survey figures, as many landlords come off their cheap 2021–22 fixes. 

The tax question

The rate rise comes just a week after we find the Budget pushing the tax burden on property income for individual landlords from 20 to 24 per cent, 40 to 44 per cent and 45 to 49 per cent for the various levels of taxation from 6 April 2027, not to mention the effects of fiscal drag – pushing people up the tax bands through the long-term freezing of allowances.

Finance cost relief under Section 24 is expected to rise to 24 per cent in step with the new property basic rate, subject to the passing of the 2027 Finance Bill. The combined effects of these rises fall hardest on the very group whose purchases are already showing signs of falling fastest.

The higher-rate taxpayers with substantial mortgages holding property in their own names will be squeezed the hardest. Companies are outside the scope of the new property income rates. It explains why most of the purchase activity is being done within a corporate structure and why today’s serious landlords are using limited companies to grow their portfolios.

The latest picture for buy-to-let

Strip back the competing headlines, and the position is consistent across these sources. The buy-to-let mortgage market has become, first and foremost, one of refinancing. 

New purchase lending is currently on a declining trend. Those landlords still buying represent a smaller, more professional group. They are typically better capitalised, focused on higher yields, and more often operating through limited companies. 

The confidence some surveys are reporting is undoubtedly real, but it is the confidence of landlords who have already committed to stay the course. The departures are in the main coming disproportionately; that’s from small-scale, individually owned, higher-geared portfolios.

A 4 per cent bank rate with an upward trend and a heavier tax charge from 2027 will reinforce that movement rather than reverse it. As I have argued several times of late, buy-to-let is not finished, but squaring the circle as an amateur landlording is increasingly more difficult to achieve. 

There are many thousands of small-scale landlords with no borrowing or minimal mortgage financing, which gives them a cushion against the vagaries of the mortgage market. Nevertheless, the tax rises are similarly unwelcome.

For the small-scale landlord, the priority now is less about expansion than about making sure the existing portfolio still works on today’s numbers.

[Main image credit: RDNE Stock Project]