UK mortgage market shows resilience amid rate shifts

Buy-to-let lending in the UK rose by 25% in the second quarter of 2026, reaching a total value of £10.7 billion. According to UK Finance, the number of new loans increased by 20.6% compared to the previous year. However, analysts noted that this growth is influenced by unusually low activity in the prior year and that higher borrowing costs may lead to flatter growth throughout the remainder of 2026.

Remortgaging has become a primary driver for landlords, accounting for approximately three-quarters of completed buy-to-let loans during the period. This trend is expected to continue into 2027 as fixed-rate deals from previous years mature.

In the retail sector, TSB has announced reductions of up to 0.10% on selected 2-, 3-, and 5-year fixed-rate house purchase mortgages, alongside minor cuts to some remortgage products. These adjustments come as UK inflation rose to 3.5% in the year leading to September, driven largely by increased fuel prices. While mortgage brokers welcomed the TSB cuts, they noted that economic uncertainty ahead of the upcoming Budget continues to impact buyer activity.