The latest figures from UK Finance for the second quarter of 2025 tell a story that is not being told nearly enough - the buy-to-let market is showing real resilience, and in doing so is sending a clear signal to advisers there are opportunities to be had.
Interestingly, this is not data on mortgage lending or approvals, but it’s around mortgages in arrears – again, a topic that we tend not to focus too much on for obvious reasons, but is clearly important in the grand scheme of things, particularly for us lenders, but also advisers.
According to the data, in Q2 this year there were 11,270 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance, which is 5% down on the previous quarter. Within that, the lightest arrears band saw an even more encouraging fall of 6%.
So, clearly, while arrears in any market is not something to highlight as being a huge positive, the fact that both have fallen over the previous quarter, is worthy of note. Because these are the numbers of a sector where the vast majority of landlord borrowers are, for the most part, in control of their portfolios, have the rental coverage they need, and are continuing to meet their commitments in the face of what has often been a challenging few years.
It’s worth pausing on that point because so often the narrative around buy-to-let focuses on the pressure points - whether it’s higher mortgage costs, increased regulation, or political scrutiny - yet the reality is that the fundamentals remain robust.
Tenant demand has not gone away; if anything, it has strengthened. In many parts of the UK, the imbalance between supply and demand is as acute as ever, which supports rental values and, by extension, landlord yields.
Those yields are what underpin much of the sector’s resilience. They provide the income to cover finance costs, to absorb some of the increases landlords have faced, and in many cases to continue delivering a profit. That profitability is key, because it is what keeps landlords engaged in the market, looking at their options, and willing to consider future investment.
All of this is happening against a backdrop that has just shifted in landlords’ favour. The Bank of England’s decision to cut Bank Base Rate (BBR) to 4% in August is both welcome and, in my view, necessary.
GDP fell in both May and June before improving, and while inflation remains above the 2% target at 3.6%, the Monetary Policy Committee clearly recognised the trade-off between tackling inflation and supporting growth. Many economists have warned about the risks of holding rates too high for too long, and this cut shows the Bank is taking steps to avoid that. For the buy-to-let market, it is an important signal that monetary policy is easing, and it should start to filter through into swap rates and product pricing.
We’ve already seen those effects begin to emerge, and at Fleet we continue to act quickly to make sure advisers and their landlord clients can take advantage. Over recent weeks, we have reduced rates across each of our core ranges, introduced new 65% LTV two-year fixed rate products, and cut product fees on selected for both standard and limited company borrowers products.
Every HMO and MUFB fixed rate we now offer comes with £1,000 cashback, which is a tangible addition to the value advisers can present to their landlord clients. These are not small tweaks; they are part of a deliberate strategy to keep our range competitive, to align with market movements, and to respond directly to feedback from the advisers we work with.
For advisers, the combination of stronger market fundamentals, improved pricing, and enhanced product choice creates a clear opportunity. There are thousands of landlords who will see fixed rates maturing in the second half of 2025 and into 2026.
If these are two-year deals coming to maturity, many will have been taken out at a time when rates were higher than they are today. That creates a very different refinancing conversation to the one advisers might have been having a year ago. Affordability is improving, and the options available now could allow landlords not only to refinance on better terms, but also to release capital for portfolio growth or to restructure borrowing to support a long-term strategy.
This is why it’s important to look beyond the headline rate cut and the arrears data in isolation. Put them together, and you have a market dynamic that is much more positive than some might assume.
Landlord confidence is strengthening, and when that confidence is combined with competitive products, strong tenant demand, and sustainable yields, the case for investment becomes compelling again. That doesn’t mean every landlord will rush to buy, but it does mean advisers have a far stronger hand to play when talking to clients about their options.
So, if there’s one takeaway from both the arrears statistics and the latest market developments, it’s that this is not a sector in retreat. The private rental market remains a vital and profitable part of the housing landscape, and the conditions for landlords have improved. For advisers, that means now is the time to be on the front foot, to start those conversations, and to turn the current momentum into long-term opportunities for clients.
