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property marketCommercial Trust quarterly index – Q1 2026
The UK buy to let market saw a decisive shift in Q1 2026, with landlords increasingly targeting higher-yielding regions in the North, while prioritising remortgaging over new acquisitions.
Drawing on the latest lending data, the Commercial Trust Quarterly Index reveals a market undergoing strategic repositioning. Falling loan sizes and a growing focus on portfolio optimisation all point to a more calculated approach from landlords navigating today’s economic landscape.
Key insights from Q1 2026
- Average loan size fell 7.5% to £194,695 (down from £210,477 in Q1 2025)
- Remortgages accounted for 55% of all applications, up from 46.6%
- Purchase loan sizes dropped 21%, reflecting a move to lower-value properties
- Bridging finance increased by 62%, indicating more complex investment strategies
- Second charge lending rose 76%, showing demand for flexible capital
- Buy to let activity shifted north, particularly to the North East, Yorkshire and the North West
A market focused on optimisation
A defining trend of Q1 2026 is the dominance of remortgaging. With over half of all applications driven by remortgage activity, landlords are clearly prioritising portfolio optimisation over portfolio growth.
Rather than expanding aggressively, investors are:
- Securing rates
- Releasing equity
- Restructuring existing portfolios
At the same time, purchase activity has slowed, with a 21% drop in average purchase loan size. This suggests landlords are being more selective, targeting lower-value, higher-yield opportunities rather than competing for expensive assets.
Regional trends: A clear northern migration
One of the most significant shifts in Q1 2026 is the redistribution of buy to let capital across the UK.
Growth in northern and regional markets
Comparing Q1 2025 with Q1 2026, landlords increasingly favoured:
- North East
- North West
- Yorkshire and the Humber
These regions offer:
- Lower entry prices
- Stronger rental yields
- Greater long-term growth potential
The North East and North West share top spot with 14.4% of purchase activity each.
Declining activity in traditionally dominant regions
In contrast, demand from investors buying within the region they live softened:
- London (local buyer share down to 64.3% from 78.3% the year before)
- East of England (local buyer share down to 60.0% from 72.9% the year before)
- Scotland (local buyer share down sharply from 93.8% to 70% the year before)
Surging local investment in the South and Wales
Interestingly, some southern regions saw strong increases in local buyer dominance:
- South East: up to 84.6% from 59.6% in 2025
- South West: up to 77.8% from 55.8% in 2025
- Wales: up to 80% from 62.5% in 2025
This suggests a growing preference for localised, knowledge-driven investing—even in areas experiencing pricing pressure.
Specialist loan sizes on the rise
Alongside geographic shifts, Q1 2026 data highlights a sharp rise in specialist lending products, with significant increases in loan values:
| Product | Change YoY |
| Bridging finance | +62% |
| Second charge | +76% |
| Further advance | +59% |
This could indicate:
- Increasing use of short-term funding strategies
- More sophisticated portfolio restructuring
- Greater reliance on flexible financing
The rise in bridging finance—paired with falling purchase loan values—suggests landlords could be exploiting opportunistic deals and refurbishment strategies.
What this means for landlords
The Q1 data paints a picture of a maturing and increasingly strategic market.
Key behavioural shifts
Landlords appear to be:
- Focusing on yield rather than capital growth
- Actively managing existing portfolios
- Diversifying geographically
Market implications
- Demand for remortgage products is likely to remain strong
- Regional markets may continue to attract investment for those pursuing strong yields
- Competition may intensify in high-yield areas
Expert commentary
Jorden Abbs, Chief Executive of Commercial Trust, said:
The data from Q1 2026 shows a decisive shift in landlord strategy. Remortgaging is naturally a large part of the business we do, due to our returning client business, but this data excludes that and still shows dominance in refinance activity, highlighting a market focused on optimisation.
“We’re also seeing a clear movement towards higher-yielding regional markets, particularly in the North, which could be reflective of landlords adjusting to economic pressures and changing returns.
“For those landlords looking at diversification to benefit from strong yields, Houses of Multiple Occupation (HMOs), Multi-Unit Freehold Blocks (MUFBs), holiday lets and commercial investment are also avenues well worth investigating.
Why average loan sizes are falling
The 7.5% drop in average loan size is a critical indicator of changing market dynamics.
This decline may be driven by:
- A shift to lower-value properties
- Increased activity in more affordable regions
- Greater caution in response to economic conditions
For investors, this reflects a move towards risk-managed, yield-driven decision-making.
The continued rise of remortgaging
With remortgages now accounting for 55% of all new applications, this trend is likely to continue into future quarters.
Key drivers include:
- Rate changes and refinancing opportunities
- Equity release for reinvestment
- Portfolio restructuring strategies
This reinforces the importance of advisory-led lending and tailored financial solutions.
Download the full report
For a complete breakdown of the data, including regional analysis and product-level insights:
Download the Commercial Trust Quarterly Index – Q1 2026 (PDF)
Methodology
The Commercial Trust Quarterly Index is based on internal lending data from mortgage applications submitted during Q1 2026.
It reflects:
• A broad mix of buy to let investors
• Lending across all UK regions
• Multiple product types including purchase, remortgage and specialist finance