UK Buy-to-Let RMBS: Stabilising Credit, Broadening Issuance

The UK buy-to-let (BTL) market has benefited from a more favourable interest rate environment. The Bank of England’s base rate has fallen 150 basis points (bps) to 3.75% from its 5.25% peak, easing a key headwind for the sector. Lower borrowing costs, alongside continued rental growth, have supported landlord cash flow, interest coverage, and remortgaging capacity, while arrears among pre-2014 loans have declined and those among post-2014 loans have remained broadly stable. These conditions have also supported BTL origination volumes, driven by remortgaging, and active residential mortgage-backed securities (RMBS) issuance. Issuance volumes through the first seven months of 2026 were broadly in line with the same period in 2025, although spread across a higher number of transactions. Market participation has also broadened, with a larger and more diverse group of issuers active in recent years, although repeat issuers continue to account for most activity.

In this report, KBRA examines…