Comment: Resilience is paying off in buy-to-let – Mortgage Strategy
Recently, the buy-to-let (BTL) market has had to contend with a difficult mix of higher borrowing costs, increased operating costs and regulatory change.
However, this picture is starting to change as rental growth strengthens again in parts of the country, while BTL interest rates have gradually reduced.
Together, these trends can improve affordability for landlords and give them greater scope to refinance, invest and add to their portfolios.
According to data from Hamptons, the average rent on newly let homes across Great Britain reached £1,392 a month in June — 1.6% higher than a year earlier and the strongest annual rate of growth for new lets in 13 months.
The figures point towards a market that is adjusting
The recovery is being led in England by the North, with the Northeast recording annual rental growth of 4.3% on newly let homes. Average rents in the region reached £859 a month. This contrasts with inner London, where annual growth slowed to 0.4%, although outer London returned to positive growth at 1.9%.
Scotland is an important part of the overall picture, recording the largest rent increases among existing tenants, with an average uplift of 8.0%. Earlier this year, at Landbay, we expanded our Premier BTL range into Scotland, so these recent figures reflect our view that there are opportunities for landlords across a broad range of regional markets, particularly where rental demand and yields remain strong.
Across the whole rental market, covering both new lets and existing tenancies, rents increased by 2.2% over the year. For landlords, these figures matter far more than rental income alone because rental values are a key part of BTL affordability calculations.
Mortgage pricing
At the same time, mortgage pricing has been moving in a more helpful direction. For example, we’ve continued to review and reduce rates across parts of our BTL range as funding conditions have allowed. And we’re not alone.
Lower mortgage rates don’t simply reduce the potential monthly cost of borrowing; they can also improve the calculations when lenders assess whether rental income is sufficient to support a loan. That means landlords are beginning to benefit from movement on both sides of the affordability calculation, with stronger rents in many areas and lower mortgage rates.
A case that did not meet affordability requirements several months ago may produce a different result today
In light of these positive moves in both rental yields and interest rates, it’s also worth considering the resilience landlords have shown.
The sector has faced major changes over recent years, as higher interest rates have arrived alongside greater regulation and rising property and management costs. Yet many landlords have responded by reviewing their portfolio, selling assets that have underperformed, refinancing where appropriate and becoming more selective about where they invest.
Cautious confidence
As indicated by Hamptons, we’re possibly seeing the tail end of landlord sales, with June marking a turning point for rental supply, not because landlord buying has risen but because sales have fallen.
Landlords continue to face a range of cost and regulatory pressures, but that does not mean investment has stopped
Landlords accounted for 10.2% of all purchases in June 2026, while previously rented homes made up 9.2% of homes listed for sale. This means that, for the first time since 2019, the share of homes bought by landlords exceeded those sold.
There are good reasons, therefore, for cautious confidence about the direction of the BTL market. Affordability, of course, remains central to almost every investment and refinancing decision, so improved mortgage pricing, combined with continued rental growth, should mean more landlords have options.
For brokers, this makes it increasingly important to revisit cases and keep in close contact with landlord clients, as a case that did not meet affordability requirements several months ago may produce a different result today. The same applies to landlords who put investment plans on hold when borrowing cost more.
The recovery is being led in England by the North, with the Northeast recording annual rental growth of 4.3% on newly let homes
Landlords continue to face a range of cost and regulatory pressures, but that does not mean investment has stopped. Instead, the figures point towards a market that is adjusting.
With rental growth strengthening in a number of regions and lenders continuing to compete on price, affordability is moving in a more helpful direction. That should give landlords greater room to assess new purchases, refinance portfolios and make longer-term decisions about their assets.
Rob Stanton is sales & distribution director at Landbay
This article featured in the September 2026 edition of Mortgage Strategy.
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