Lettings Market – Q3 2025

It seems timely with the UK Finance data coming out this week to have a look back at 2025 to date and see what’s ahead in the coming quarter for landlords. With thanks to Foxtons, Paragon and OSB Group for their comment and valuable insight.

London’s rental market saw a boost in confidence last month, with a significant uptick in both tenant interest and property availability.*

Gareth Atkins, Managing Director of Lettings at Foxtons, explained: “The London lettings market showed strong signs of stability in June, with applicant numbers rising 21% from May and new listings at their strongest level in four years. This increase in supply is helping to ease pressure on renters, as seasonal demand increases, and with more applicants in the market, good Landlords will see strong demand across the capital. As we move into the summer, we expect this healthy balance between supply and demand to continue, offering more choice for renters and a stable and predictable environment for London’s landlords."

According to Paragon, the volume of landlords exiting the market has been exaggerated. There are less institutional landlords exiting and they’re focused more on disposing of poor performing properties.

Adrian Moloney, Group Intermediary Director at OSB Group, commented: “There’s evidence of new landlords entering the market, and existing ones expanding their portfolios. New data from TDS Charitable Foundation that found 23% of private landlords have increased the number of properties they rent out over the last year, up from 19% in 2024. Landlords expanding their portfolios bought an average of 2.5 homes in the past 12 months, again an increase from the previous year. This shows that there’s still plenty of commitment in the market for those who are in it for the long term and remain positive.”

In the first quarter of this year in the UK, there were 58,347 new buy-to-let loans advanced in the UK. This was up by over 38% in numbers and almost 47% in value compared with the same quarter in 2024.**

Louisa Sedgwick, Managing Director – Mortgages at Paragon, commented: “While some of this activity may reflect landlords accelerating purchases ahead of Stamp Duty threshold changes, it continues the momentum seen throughout 2024, when lending rose to £34 billion from £29 billion in 2023—the lowest since 2014. This resurgence signals that landlords are ready to invest when conditions are right. Falling interest rates and improved product availability are contributing factors. Paragon’s data shows yields recently hit a 14-year high, with nearly 80% of landlords reporting profits.”

Richard Merrett, Managing Director of Alexander Hall highlighted: “The market data is extremely encouraging for the BTL sector and demonstrates the robustness and confidence in property as an investment. I think this is set to improve further with the consistent improvements in many areas: lender criteria, propositions, affordability - which is positively impacting borrowing power, and BTL rates, where some are now available sub-3%.”

Whilst the upcoming legislation changes might pose some challenges, the message to landlords is clear: Ensure your portfolios are managed by a reputable letting agent, that comprehensive rent protection is in place, and that all properties meet the minimum energy efficiency standards. Taking these steps promptly will help safeguard your assets, ensure regulatory compliance, and support long-term rental success.

The landlords primarily affected by these changes will be the ones who’ve failed to react in time. If you own your rental stock and want to continue to manage it yourself, do make sure you’re up to date with incoming legislation changes.

Key actions:
• Ensure your EPC has been updated if you’ve had your home upgraded - check your energy certificate.
• Explore the managed options available to you.
• Add comprehensive rent protection, if feasible.

* Foxtons
** Buy-to-Let Lending | UK Finance

OSB Group is one of the UK’s leading specialist lenders and offers a diverse range of buy to let, residential (including Help to Buy and shared ownership), commercial, semi-commercial and bridging finance products.

Paragon Bank PLC are a specialist lender and savings bank offering a range of products and services in the UK. They are part of the FTSE 250.