The pace of the UK’s buy-to-let expansion is slowing as landlords increasingly shift their attention from new acquisitions to refinancing existing portfolios, according to new data from mortgage technology firm Twenty7tec.

The figures show buy-to-let purchase searches fell by 13.67% year-on-year in October, while remortgage searches rose by 6.05%.

After several years of strong investor activity – including a peak in September 2022 when buy-to-let accounted for 21% of all mortgage searches – the market appears to have entered a phase of consolidation.

Twenty7tec’s data shows that two-thirds of landlord search activity now relates to remortgaging, with buy-to-let purchases making up just 33.1%.

STABILITY NOT EXPANSION

The shift follows a period of rising borrowing costs and tighter yields, which have prompted landlords to prioritise stability over expansion.

Across the wider mortgage market, the number of live products reached a record 28,835 at the end of October, suggesting growing confidence among lenders even as new purchase demand cools in the run-up to the Autumn Budget.

Nakita Moss, Head of Lender Relationships at Twenty7tec, said: “We’re seeing a clear behavioural shift as landlords respond to higher borrowing costs and tighter yields.

“More landlords are focused on refinancing rather than expanding, taking advantage of stabilising rates to secure long-term certainty.

“The era of portfolio growth has paused – for now it’s about resilience and risk management.”

FIRST-TIME BUYERS

The data also highlights weakening activity among first-time buyers, whose searches fell to 297,387 – the lowest level this year – as households await greater economic clarity.

Landlords are expected to monitor the forthcoming Autumn Budget closely for any changes to property taxation, stamp duty thresholds or rental market incentives.

Last year’s Budget introduced a rise in the higher rate stamp duty surcharge on second homes and investment properties from 3% to 5%, which triggered a sharp drop in buy-to-let transactions in the months that followed.

Nathan Reilly, Commercial Director, added: “The figures suggest a market in transition: steady, active, and cautious.

“Landlords appear to be locking in rates while they can, signalling confidence in the long-term rental market but restraint when it comes to expansion.”

CALCULATED CHOICES

Alex Greenin, director of The Mortgage Guy, said: “I have seen a bit of a slowdown in buy-to-let purchases, but people are still investing, just not at full speed. They’re being more calculated with their choices.

“I completely agree that landlords are focusing on remortgaging as fixed rates come to an end.

“They’re working hard to make their portfolios perform as efficiently as possible. The smaller, back-room landlords have definitely taken a hit over the past few years.

“There isn’t as much profit in buy-to-lets as there used to be, and that’s forcing many to rethink their strategy rather than expand.”