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The UK’s buy-to-let market has seen a strong resurgence at the start of the year, with new figures from UK Finance showing a 39% jump in buy-to-let lending. After a period of cautious sentiment among landlords, the combination of falling mortgage rates, strong rental demand, and renewed economic confidence is reinvigorating investment activity.
For UK expat and foreign national investors, this shift highlights growing opportunities in a market that continues to deliver stable long-term returns.
A £10.5bn Boost to Buy-to-Let Lending.
In the first quarter of this year, landlords took out more than 58,000 new buy-to-let mortgages with a total value of £10.5bn. This represents a 46.8% increase compared with Q1 2024 and underlines the strong recovery of investor confidence. Crucially, the average interest rate on these new mortgages fell by 41 basis points year-on-year. For landlords, this drop is directly improving affordability and profitability. With many investors working to tight margins in recent years, the easing of finance costs is a welcome boost.
‘The recent reduction to the Bank of England’s base rate has made the proposition of UK property investment even more attractive’ says Stuart Marshall, CEO of Liquid Expat Mortgages. ‘The general positivity amongst UK expat and foreign national investors is likely to improve even further as specialist lenders pass the interest rate cut onto customers.’
Profitability Improving for Landlords.
Profitability in the buy-to-let sector has strengthened alongside the surge in lending. The interest cover ratio (ICR) – a key measure used by lenders to assess rental income against mortgage repayments – rose to 202% in Q1 2025, up from 190% a year earlier. This means landlords are left with a greater buffer between rent collected and mortgage costs, which is vital for long-term financial resilience. For expat and foreign national investors, this change is particularly encouraging, as affordability requirements have sometimes been a barrier to accessing UK buy-to-let mortgages.
Rental Yields at a 14-Year High.
Adding to the positive outlook, UK rental yields have hit their highest levels in more than a decade. Recent research from Paragon Bank reports that average yield stood at 7.11% in May, with certain regions delivering even stronger returns. Amongst these top performing regions are Wales (8.43%), Yorkshire and the Humber (7.97%), and the North of England (7.94%). ‘These regions are not only producing higher rental income but also outperforming much of the South of England in terms of capital appreciation at the moment. For overseas investors, this presents a dual opportunity: strong cashflow today, with the potential for property value growth in the future. It’s for this reason that we’ve seen so many UK expat and foreign national investors choosing to put their money outside of London and the South East recently.’
A Market Driven by Cashflow.
While house price growth remains part of the long-term appeal of UK property, the current market is heavily driven by cashflow. Landlords are increasingly focused on the strength and stability of their rental returns rather than short-term capital gains.
This trend is particularly relevant for UK expat and foreign national investors, who are often seeking predictable income streams in addition to long-term security. At the moment, the imbalance between rental demand and housing supply continues to support both high rents and low vacancy rates, ensuring consistent cashflow.
What This Means for Expat and Foreign National Investors.
‘For UK expat and foreign national investors, the message is clear: conditions in the buy-to-let market are improving rapidly’ says Stuart Marshall. ‘Falling mortgage rates combined with rising yields are creating a more favourable environment for new and returning investors. Importantly, specialist mortgage lenders are also reducing their rates in line with the wider market. This means UK expat and foreign national investors now have more competitive options when structuring their investments.’
The sharp rise in buy-to-let lending shows that confidence is soaring in the UK buy-to-let property market. With lower borrowing costs, stronger profitability, and high tenant demand, the conditions are aligning for both existing landlords and new entrants. For UK expats and foreign nationals, the surge represents a timely opportunity to invest in one of the world’s most resilient property markets – with the added benefit of specialist mortgage products becoming more accessible and affordable.
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Rd,
Haslingden, Rossendale
BB4 5HU
Phone: 0161 871 1216
www.liquidexpatmortgages.com
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