Buy to Let mortgage applications drop amid Renters Rights Act impact
The proportion of buy to let mortgage applications for property purchases has declined by nearly 19% year-on-year, reflecting increased selectivity among landlords following the Renters Rights Act reforms.
According to data from specialist broker Commercial Trust, the share of mortgage applications for buy to let property purchases fell from 29.8% in Q2 2025 to 24.2% in Q2 2026. This marks an 18.9% decline over the year, more than double the 9.1% drop seen in Q1 2026. Despite the reduction in purchase applications, landlords are requesting larger loans, with the average purchase loan rising by £12,781 year-on-year to £207,673 in Q2 2026.
This shift suggests landlords are becoming more cautious and selective in their acquisitions, likely influenced by the new tenancy protections and obligations introduced by the Renters Rights Act. The data also reveals regional variations, with northern regions such as Yorkshire and the Humber and the North East seeing increased shares of purchase applications, while the East of England and East Midlands experienced significant declines.
Commercial Trust’s mortgage data highlights shifting landlord behaviour
The Q2 2026 Buy To Let Mortgage Index from Commercial Trust provides a detailed look at landlord mortgage application trends. While purchase applications have declined, remortgaging activity has increased, rising from 44.1% of all applications in Q2 2025 to 56.0% in Q2 2026. This indicates landlords are focusing more on managing existing portfolios and refinancing rather than expanding through new purchases.
Regional analysis shows the North West maintained the largest share of purchase applications at 14.7%, followed closely by the South East, Yorkshire and the Humber, and the West Midlands. Yorkshire and the Humber’s share increased nearly fourfold compared to the previous year, reflecting a growing interest in northern markets. Conversely, the East of England’s share plummeted from 16.0% to 2.1%, and the East Midlands dropped from 12.6% to 5.3%.
Commercial Trust’s chief executive, Jorden Abbs, commented that landlords have not ceased buying but are more selective, with a preference for larger loans and northern regions offering perceived value and rental returns. He cautioned that investors should carefully assess local demand and finance availability, rather than relying on location alone.
Context of the Renters Rights Act and its influence on landlord decisions
The Renters Rights Act, which introduced significant reforms to tenancy laws, has reshaped the private rented sector’s dynamics. It enhanced tenant protections, including longer notice periods, stricter grounds for possession, and improved dispute resolution processes. These changes have increased the regulatory and operational responsibilities for landlords, influencing investment decisions.
Landlords now face greater scrutiny and potential costs associated with compliance, which can affect the attractiveness of acquiring additional properties. The Act’s impact is evident in the reduced appetite for new purchases, as landlords weigh the risks and benefits more cautiously. The rise in remortgaging suggests a strategic focus on optimising existing portfolios to maintain profitability under the new regulatory environment.
Regional shifts in purchase applications may also reflect landlords seeking areas with stronger rental demand and better yields to offset increased compliance costs. Northern regions, traditionally offering more affordable property prices and stable rental markets, appear to be benefiting from this trend.
Practical implications for landlords and letting agents
For landlords, the data signals a need to review investment strategies carefully. The reduced volume of purchase applications suggests competition for quality properties may intensify, potentially driving up prices in preferred regions. Larger loan requests imply that landlords are targeting higher-value properties or acquiring multiple units within single transactions.
Letting agents should be prepared for a more discerning landlord client base, focusing on portfolio optimisation and compliance management rather than expansion. Advising landlords on the financial implications of the Renters Rights Act, including potential increased costs and risks, will be crucial.
Furthermore, the increased remortgaging activity highlights the importance of maintaining good relationships with mortgage brokers and lenders to secure favourable refinancing terms. Agents may also need to assist landlords in navigating the complexities of remortgaging under evolving lending criteria.
Uncertainties and considerations going forward
While the current data shows a clear trend towards fewer purchase applications and more remortgaging, the longer-term effects of the Renters Rights Act on the buy to let market remain uncertain. Changes in government policy, market conditions, and tenant demand could alter landlord behaviour again.
It is also unclear how forthcoming regulations, such as potential energy efficiency standards or further licensing schemes, might interact with the existing reforms to influence investment decisions. Landlords and agents should monitor developments closely and seek up-to-date official guidance to remain compliant and informed.
What landlords should consider now
Landlords should assess their current portfolios in light of the Renters Rights Act and the shifting mortgage market. Reviewing financing arrangements and considering whether remortgaging could improve cash flow or reduce costs is advisable. Evaluating property locations and tenant demand will help identify where investment remains viable.
Compliance with the new tenancy regulations is essential to avoid penalties and maintain positive tenant relationships. Landlords should ensure documentation, safety checks, and communication records are thorough and up to date. Engaging with letting agents who understand the regulatory environment can provide valuable support in managing these obligations.
Supporting landlords through regulatory change with TLA
The Landlord Association (TLA) offers members a range of resources to help manage the challenges arising from the Renters Rights Act and evolving mortgage market conditions. Membership provides access to detailed compliance guides, practical advice on tenancy management, and updates on legislative changes affecting landlords and letting agents.
TLA’s new property management and compliance platform, ORBIT, is currently available in BETA testing. It is designed to assist landlords and agents in organising property portfolios, managing rental documentation, and recording key compliance actions such as safety checks and tenant communications. While still in development, ORBIT aims to streamline record-keeping and help members stay informed about regulatory requirements.
Exploring TLA membership and ORBIT BETA access can support landlords in adapting to the current market environment, maintaining compliance, and preparing for future reforms.
Looking ahead, landlords will need to balance cautious investment with proactive portfolio management to navigate the ongoing impact of tenancy reforms and mortgage market shifts.
Sources: Landlord Today
TLA - The Landlord Association