Buy to Let mortgage applications fall amid Renters Rights Act impact
The share of buy to let mortgage applications for property purchases dropped by nearly a fifth in the year to Q2 2026, as landlords requested larger loans but became more selective following the Renters Rights Act.
Buy to let mortgage applications for property purchases have declined significantly over the past year, according to the latest data from specialist broker Commercial Trust. In the second quarter of 2026, purchase applications accounted for 24.2% of all buy to let mortgage applications submitted to the broker, down from 29.8% in the same quarter of 2025. This represents an 18.9% year-on-year decrease, more than double the 9.1% fall recorded in the first quarter of 2026.
Despite the reduction in the number of purchase applications, landlords seeking finance for property acquisitions requested larger loans. The average purchase loan increased by £12,781 compared to the previous year, reaching £207,673 in Q2 2026. This was also £18,069 higher than in Q1 2026, marking a 9.5% rise quarter-on-quarter.
Regional shifts in buy to let purchase activity
Regional data reveals notable shifts in buy to let purchase applications. The North East and Yorkshire and the Humber regions have seen increased shares of purchase applications. In Q1 2026, the North East’s share rose from 5.5% to 14.4% year-on-year, while Yorkshire and the Humber increased from 6.6% to 13.7%. These trends continued into Q2, with Yorkshire and the Humber accounting for 12.6% of purchase applications and the North East 8.4%, although the latter was below its Q1 peak.
The North West remained the region with the largest share of purchase applications in Q2 2026 at 14.7%, followed by the South East (13.7%), Yorkshire and the Humber (12.6%), and the West Midlands (11.6%). Conversely, the East of England experienced a sharp decline, falling from 17.6% to 3.6% in Q1 and further to 2.1% in Q2. The East Midlands and South West also saw reductions in their shares of purchase applications.
Remortgaging rises as landlords adjust portfolios
Alongside the decline in purchase applications, remortgaging activity has increased. Remortgaging accounted for 56.0% of buy to let mortgage applications in Q2 2026, up from 44.1% in Q2 2025. This suggests landlords are actively managing their existing portfolios, seeking to optimise financing arrangements amid the changing regulatory environment.
Jorden Abbs, chief executive of Commercial Trust, commented that landlords have not ceased purchasing but are exercising greater selectivity. The higher average loan sizes reflect a focus on fewer but potentially higher-value acquisitions. The sustained interest in northern regions may be driven by perceptions of better value and rental returns, but investors must still carefully evaluate local market conditions and finance availability.
Impact of the Renters Rights Act on landlord behaviour
The Renters Rights Act, which introduced significant reforms to tenancy law and landlord obligations, appears to be influencing buy to let investment decisions. The Act’s requirements have increased complexity and compliance costs for landlords, prompting more cautious purchasing strategies and greater reliance on professional advice. This aligns with broader sector trends where landlords are reassessing risk and potential returns in light of enhanced tenant protections.
The decline in purchase applications could have implications for rental supply, as fewer new properties enter the market. Policymakers face the challenge of balancing tenant protections with incentives for landlords to continue investing in the private rented sector. The rise in remortgaging activity indicates landlords are seeking to strengthen their financial positions, possibly preparing for future investment once regulatory uncertainties ease.
Considerations for landlords and letting agents
For landlords and letting agents, the evolving market dynamics underscore the importance of thorough financial planning and risk assessment. Larger loan requests mean increased exposure, making it vital to ensure affordability and compliance with lending criteria. The regional shifts suggest opportunities may be more favourable in certain areas, but local market research remains essential.
Professional advice on navigating the Renters Rights Act’s requirements is increasingly valuable. Landlords should review their portfolios, tenancy agreements, and compliance procedures to align with new legal standards. Letting agents can play a key role in supporting landlords through these changes, offering expertise on regulatory obligations and tenant management.
Preparing for ongoing changes in the rental sector
The private rented sector continues to adapt to legislative reforms and market pressures. While the Renters Rights Act has introduced challenges, it also encourages higher standards and more sustainable landlord-tenant relationships. Monitoring mortgage market trends and regulatory developments will be crucial for landlords planning future acquisitions or portfolio adjustments.
Uncertainties remain regarding the long-term effects of the Act on investment behaviour and rental supply. Landlords should keep abreast of official guidance and seek professional support to ensure compliance and optimise their strategies in a changing environment.
Supporting landlords through regulatory changes
The Landlord Association (TLA) offers resources and support to help landlords and letting agents manage the impact of the Renters Rights Act and related market shifts. Membership provides access to up-to-date compliance information, practical guides, and document templates tailored to new tenancy laws. TLA’s property management and compliance platform, ORBIT, currently in BETA testing, assists members in organising property records, managing rental documentation, and recording key compliance actions.
ORBIT’s developing features include tools for maintaining evidence of regulatory adherence and tracking repair and inspection activities, which are increasingly important under the Act. By using TLA’s resources and ORBIT, landlords can better prepare for ongoing regulatory changes and maintain effective portfolio management.
Explore TLA membership to access compliance support and learn more about ORBIT BETA access.
Landlords should continue reviewing their mortgage arrangements and portfolio strategies in light of these trends, staying informed about market conditions and regulatory updates to safeguard their investments and tenants’ rights.
Sources: Letting Agent Today
TLA - The Landlord Association