| New BTL lending rose 22.7% year-on-year in Q3 2025 | Average UK rental yields increased to 7.15% | Northern cities and Wales are emerging as strong yield locations |
The number of new buy-to-let (BTL) loans advanced in the UK during Q3 2025 leapt by 22.7% year-on-year, new figures1 show. Which locations are driving this resurgence? Hint: it’s not London.
On the up
With the changes brought about by the Renters’ Rights Bill due to come into force from May, the data suggest a surprisingly bright picture for landlords.
The total value of BTL loans in the third quarter was £10.9bn, up by 28.2% compared with Q3 in 2024. This means that there were 1.44 million BTL fixed-rate mortgages outstanding in Q3 2025, a rise of 2.3% on the previous year.
Also on the up, the average gross BTL rental yield for the UK in Q3 was 7.15%, ahead of 6.93% in the same quarter in the previous year.
BTL hotspots
These averages mask strong regional differences, with analysts suggesting that the UK’s buy-to-let market is moving northwards. Manchester, Leeds, Birmingham and Sheffield are all gaining a reputation as BTL hotspots, thanks to large populations of students and young professionals.
In fact, Wales has the best rental yields in the country at 8.83%, separate research2 found, with the North East close behind at 8.2%. With affordability tightening in London, it seems that lower-cost properties outside the capital now represent better value for many investors.
Rental yields can fluctuate and are not guaranteed. Property values may fall as well as rise.
1UK Finance 2026, 2Paragon Bank 2026
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
