The UK’s buy-to-let (BTL) market is seeing a notable uplift, with new lending rising sharply in Q3 2025¹. Which parts of the country are leading this growth? A clue: it’s not the capital.

With the changes introduced by the Renters’ Rights Bill set to take effect from May, recent figures point to a more positive outlook for landlords than some may have expected.

The total value of BTL loans reached £10.9bn in the third quarter, an increase of 28.2% compared with the same period in 2024. This brings the number of outstanding BTL fixed-rate mortgages to 1.44 million in Q3 2025, up 2.3% year-on-year.

Rental yields are also improving, with the UK average gross BTL yield rising to 7.15% in Q3, compared with 6.93% in the corresponding quarter in 2024.

Behind these headline figures are notable regional variations, with many commentators suggesting the BTL market is shifting further north. Cities such as Manchester, Leeds, Birmingham and Sheffield are increasingly seen as key BTL hotspots, supported by strong populations of students and young professionals.

Wales currently offers the highest rental yields in the UK at 8.83%, according to separate research², with the North East following at 8.2%. As affordability pressures continue in London, lower property prices outside the capital are increasingly appealing to investors seeking better returns.

¹UK Finance 2026, ²Paragon Bank 2026

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.