Buy-to-let (BTL) repossessions are on the rise and experts are warning landlords face “tough times” ahead.
There were 770 BTL mortgage possessions in the last three months of 2025, up 10% from 700 in the same period in 2024, according to the latest data from trade body UK Finance.
Meanwhile, landlords taking out a BTL mortgage in mid-April compared to the start of March face higher repayments of roughly £1,300 more a year, based on analysis by data firm Moneyfactscompare.
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This is based on borrowing £250,000 over 25 years at 5.45% versus 4.66% at the start of March. Mortgage rates have risen after conflict in the Middle East broke out on 28 February, amid expectations inflation could surge.
Rachel Springall, finance expert at Moneyfactscompare, said: “Tough times are ahead for landlords as the profitability of buy-to-let has been damaged due to tighter legislation, and with rising running costs eating into profit margins, it is squeezing them from all sides.
She added: “It is worrying to think that landlords could be failing to keep up with mortgage repayments.
“In the months ahead, the cost of living is predicted to worsen, and this will be magnified if landlords are due to come off a cheap fixed rate, because mortgage rates have been rising.”
We look at which is best out of a buy-to-let or shares in another piece.
Are rents going up or down?
Monthly rents outside Greater London stayed at £1,370 in Q4 2025 and the first three months of 2026, separate data published by property portal Rightmove shows.
It is the first time there has been no rise over this time period since 2017, although average rents outside of the capital in Q1 2026 were still 1.6% higher than Q1 2025.
Rightmove put the figures down to lower tenant demand and a greater supply of rentals on the market, with the total number of homes available to rent across Great Britain up 3% from the same time in 2025.
The property website also said slowing wage growth and higher than 2% inflation have squeezed people’s budgets and what they can afford to pay for rent.
In the first three months of 2026, 26% of rental listings saw a price reduction, the highest proportion at this time of year since 2012.
Colleen Babcock, property expert at Rightmove, said: “With more homes available to rent and less competition between tenants, landlords are needing to position rents correctly for the current market to secure a tenant.”
Are there reasons for optimism in the buy-to-let market?
There are some signs of positivity, with the number of newly-listed rentals coming onto the market in March 2026 6% lower than the same month in 2025, according to Rightmove.
UK Finance’s latest figures also show an 18% rise in the number of new BTL loans taken out in the last three months of 2025 compared to the same period in 2024.
The trade body’s data also reveals the average rental yield rose to 7.18% in Q4 2025, up from 6.99% in the same quarter in 2024.
However, this data does not reflect the impact of the conflict in the Middle East.
What landlords can do now
Landlords facing a tricky market can take steps to ease the strain and boost their margins, says Nick Mendes, mortgage technical manager at broker John Charcol.
Where a rise in rent is unavoidable, it “tends to land better when there is some visible value alongside it, whether that is improving storage, replacing tired fittings, being quicker on repairs or making the property feel better looked after,” says Mendes.
Reconsider asking for the highest possible amount of rent as well, as a tenant paying slightly less could still prove more profitable over the long-term.
Mendes says: “A reliable tenant on a slightly lower figure can still be the better outcome once void periods, re-letting costs and disruption are factored in.”
Meanwhile, landlords can spread equity around their portfolio to manage costs and borrowing. For example, by remortgaging a home with a small loan left on it, then using the equity to pay down a larger mortgage on another property, or by covering repair costs on another property.
It is worth reviewing costs more generally as well to see if you can save money, says Mendes, including home insurance and energy bills.
Separately, landlords will need to prepare for new Renters’ Rights Act rules coming into force from 1 May.
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