House purchases accounted for £2.7bn, while £500m was for other lending, UK Finance’s latest data found.
By number, new BTL loans for remortgage equated to 39,631 out of an overall total of 58,051.
UK Finance said the new loans advanced in Q2 represented increases of 20.6% by number and 25% by value versus Q2 2025.
Elsewhere, the average gross BTL rental yield for the UK in Q2 2026 was 7.27%, marking little change from 7.26% in the same quarter last year.
The average interest rate across all new BTL loans in the UK was 4.82%, 12 basis points (bps) up versus the previous quarter. However, compared to the same period in 2025, this was a decrease of 18bps.
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The average BTL interest cover ratio (ICR) was 217%, up from 210% in Q2 2025 and down from 221% in the previous quarter. UK Finance said this was reflective of interest rate movement.
The number of BTL fixed rate mortgages outstanding in Q2 was 1.46 million, 0.7% less than a year previously. The number of variable rate loans outstanding also underwent a drop, falling by 3% to 450,000.
At the end of Q2 2026, there were 8,390 BTL mortgages in arrears greater than 2.5% of the outstanding balance, down 570 from the previous quarter.
Some 630 BTL mortgage possessions were taken in the quarter, down 20.3% from the same quarter a year previously.
‘Remortgaging continues to be the story of 2026’
Louisa Sedgwick, managing director of mortgages at Paragon Bank, commented: “Remortgaging continues to be the story of 2026, accounting for approximately three quarters of completed buy-to-let loans during the period. We expect that trend to continue throughout the rest of this year and into 2027 as five-year loans written during the buoyant market of 2021 and 2022 mature.
“Overall lending has remained fairly robust considering the impact of the Iran War on mortgage pricing, with the value and number of loans for buy-to-let house purchase in line with the average quarterly level recorded since 2024, the period when the market entered recovery following the mini Budget.”
She added: “The number of new purchases today is running approximately 5,000 below the average run rate per quarter since 2013, however, and I suspect new stock entering the market is not keeping pace with exits.
“That creates long-term challenges for tenants through diminished choice and inflated rents, so policymakers need to be mindful of this growing imbalance between supply and demand as it considers next steps for housing policy.”
