One in three landlords sought new finance last year—what this means for the sector
Professional landlords continue to drive buy-to-let borrowing and advice demand, although confidence has softened slightly amid concerns over the Renters’ Rights Act, according to new research.
The Q4 2025 Landlord Trends research from Foundation, conducted by Pegasus Insight among 837 landlords, found that one in three landlords sought new finance, refinancing, or a product transfer in the past 12 months. Among landlords with existing buy-to-let borrowing, this figure rose to six in 10.
Foundation is a trading style of Paratus AMC, an intermediary-only specialist lender and mortgage servicer.
Landlords with borrowing currently hold an average of 6.5 individual buy-to-let loans across more than two lender relationships. Total average borrowing stands at £714,000, with an average loan-to-value ratio of just under 50%. Seven in 10 landlords used a broker to arrange their most recent mortgage, with most starting the process at least three months before their deal ended.
Private landlords dominate buy-to-let market
The research shows that limited company and portfolio landlords continue to behave differently from smaller, individual landlords. Limited company landlords hold far larger portfolios on average, are more likely to use buy-to-let finance and are more active in refinancing and rent reviews.
Concerns around the Renters’ Rights Act are now central to landlord decision-making. Three-quarters of landlords are aware of the legislation, an 8% increase on the previous quarter, with awareness highest among portfolio and limited company landlords. Around 75% believe the Act will negatively affect their own lettings activity, while 84% expect it to have a negative impact on the private rental sector as a whole.
Potential delays in the court system for regaining possession have become the single biggest concern for landlords, overtaking energy efficiency requirements and tax changes.
The Law Society of England and Wales has warned that the government must invest in courts ahead of the Renters’ Rights Act, as private landlord repossessions have increased by 3% compared with the same period last year. New quarterly statistics from the Ministry of Justice found this rise comes months before Section 21 evictions are abolished in England on 1 May.
From 1 May 2026, new laws will give 11 million renters stronger rights, better protections, and more security in their homes. No more ‘no-fault’ evictions will mean landlords in the private rented sector won’t be able to evict tenants without a valid reason, a report from Ministry of Housing, Communities & Local Government in the Media noted. All tenancies in the private rented sector will roll on from month to month or week to week with no end date, giving renters more flexibility.
Private investor drive market activity
Despite current concerns, profitability across the sector remains resilient. Eighty-five per cent of landlords still report making a profit from their lettings activity, although this has eased slightly from the previous quarter. Average rental yields now stand at 6.4%, down marginally from 6.6% in the last quarter.
However, nearly half of landlords now plan to sell at least one property in the next 12 months, while just 5% intend to buy. Foundation said this reflects portfolio reshaping rather than panic, with larger and more established landlords far more likely to remain active and engaged.
UK Finance forecasts that around 1.8 million loans are due to expire throughout 2026, with external remortgaging set for annual growth of 10% to £77 billion and product transfer business expected to increase by 2% on 2025 to £261 billion. Within buy-to-let specifically, UK Finance data as of September 2025 showed that £49 billion of fixed-rate mortgages are due to mature within a year across 250,000 mortgages.
New buy-to-let lending was up by 11% in 2025 to £11 billion, though UK Finance forecasts that to remain unchanged in 2026, with growth being impacted by additional taxes and regulation.
“While confidence has softened slightly, the underlying behaviour of professional landlords remains very clear. They’re still borrowing, refinancing and seeking advice in significant numbers, and they’re doing so earlier and more carefully than before,” said Grant Hendry, director of sales at Foundation Home Loans.
“The complexity of portfolios, combined with regulatory change such as the Renters’ Rights Act, means brokers and specialist lenders have an increasingly important role to play.”
