Tough times ahead for landlords as they face a financial squeeze
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, comments on the buy-to-let statistics (Q4 2025 data) from UK Finance, out today.
“Tough times are ahead for landlords as the profitability of buy-to-let has been damaged due to tighter legislation, and with rising running costs eating into profit margins, it is squeezing them from all sides.
“Repossessions of buy-to-let properties are up by 10% year-on-year, and it is worrying to think that landlords could be failing to keep up with mortgage repayments.
“In the months ahead, the cost of living is predicted to worsen, and this will be magnified if landlords are due to come off a cheap fixed rate, because mortgage rates have been rising.
“Those who were to take out a mortgage now compared to the start of last month will face higher repayments of around £1,300 more a year. This is based on a borrowing of £250,000, over 25 years at 5.45%, versus 4.66% at the start of March 2026.
“Typically, landlords would spend time building up a decent-sized property portfolio to receive a good return on their investment over the years. However, if they do not have dependable tenants to cover mortgage costs, a property portfolio can turn into a huge financial burden.
“During Q4 2025, the average gross buy-to-let rental yield rose to 7.18%, up from 6.99% in the same quarter a year earlier.
“The rush to remortgage was prevalent during Q4 2025, with a 28% year-on-year rise in remortgages for new buy-to-let loans, plus there was a 27.5% yearly rise in buy-to-let product transfers.
“The average buy-to-let interest cover ratio increased to 218% in Q4 2025, versus 201% a year earlier and 215% in the previous quarter.
“Rising costs this year could lead to higher rental payments for tenants, or a drop in the pool of properties available for rent if landlords decide to sell up.”
Tough times ahead for landlords as they face a financial squeeze
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, comments on the buy-to-let statistics (Q4 2025 data) from UK Finance, out today.
“Tough times are ahead for landlords as the profitability of buy-to-let has been damaged due to tighter legislation, and with rising running costs eating into profit margins, it is squeezing them from all sides.
“Repossessions of buy-to-let properties are up by 10% year-on-year, and it is worrying to think that landlords could be failing to keep up with mortgage repayments.
“In the months ahead, the cost of living is predicted to worsen, and this will be magnified if landlords are due to come off a cheap fixed rate, because mortgage rates have been rising.
“Those who were to take out a mortgage now compared to the start of last month will face higher repayments of around £1,300 more a year. This is based on a borrowing of £250,000, over 25 years at 5.45%, versus 4.66% at the start of March 2026.
“Typically, landlords would spend time building up a decent-sized property portfolio to receive a good return on their investment over the years. However, if they do not have dependable tenants to cover mortgage costs, a property portfolio can turn into a huge financial burden.
“During Q4 2025, the average gross buy-to-let rental yield rose to 7.18%, up from 6.99% in the same quarter a year earlier.
“The rush to remortgage was prevalent during Q4 2025, with a 28% year-on-year rise in remortgages for new buy-to-let loans, plus there was a 27.5% yearly rise in buy-to-let product transfers.
“The average buy-to-let interest cover ratio increased to 218% in Q4 2025, versus 201% a year earlier and 215% in the previous quarter.
“Rising costs this year could lead to higher rental payments for tenants, or a drop in the pool of properties available for rent if landlords decide to sell up.”
