Mortgage Lending Edges Up in January 2026: What London Landlords Need to Know

Understanding the January 2026 Mortgage Lending Landscape

According to the Bank of England, UK mortgage lending nudged up to £23.4 billion in January 2026, marking a subtle rise from the previous month. However, mortgage approvals for house purchases and remortgaging slightly declined. Simultaneously, interest rates on new and outstanding mortgages decreased marginally, easing borrowing costs.

This mixed picture reflects a housing market resiliently navigating the lingering uncertainties from the recent Autumn Budget and broader international economic factors.

Why This Matters for London Landlords

For landlords in London—where property prices and rents remain above the national average—these mortgage market developments have immediate practical consequences:

• Tenant Affordability and Demand: Lower mortgage interest rates may encourage some tenants to consider buying, which could moderate rental demand. On the other hand, reduced mortgage approvals hint that some prospective buyers may face tighter lending conditions, potentially sustaining or increasing rental demand in certain segments.

• Portfolio Financing and Investment Decisions: The modest lending volume rise suggests finance availability, yet the dip in approvals advises caution. Landlords depending on buy-to-let mortgages should closely monitor lending criteria changes, as shifts could impact refinancing and acquisition strategies.

• HMO and Single-Unit Landlords: Larger portfolio landlords might feel more impact from changing lending environments, especially when refinancing multiple properties. Single-unit and accidental landlords should assess their mortgage terms and consider how rate fluctuations influence cash flow.

Practical Steps to Adapt Your Landlord Strategy

1. Review Tenant Screening and Affordability Criteria

Reassess tenant affordability checks in light of the evolving mortgage landscape. While some tenants might shift towards purchasing if rates stay favorable, others may face mortgage approval challenges and remain renters longer. Adjust income verification and affordability thresholds accordingly to mitigate arrears risks.

2. Consult Financial and Mortgage Advisers

Engage with mortgage brokers or financial advisers to understand the implications of current lending patterns on your portfolio. They can help identify refinancing opportunities, forecast interest rate trends, and explore alternative financing.

3. Communicate Proactively with Tenants

If tenants are approaching remortgage periods, check in to gauge any financing difficulties stemming from the drop in approvals. Offering payment flexibility or customized tenancy agreements may improve tenant retention and reduce void periods.

4. Monitor Economic and Regulatory Updates

Stay updated on Bank of England announcements and government policy changes related to mortgage availability and costs. This vigilance allows you to anticipate market shifts and adjust rental pricing or acquisition plans accordingly.

Benchmarking Your Local Market

The £23.4bn lending figure is UK-wide, but London’s housing market often behaves differently due to higher property values and diverse tenant profiles. Use local mortgage broker data and estate agent reports to track lending trends specific to your borough or postcode.

Next Steps for London Landlords

• Schedule a portfolio review focusing on mortgage terms and upcoming refinancing.
• Meet with a trusted mortgage broker to discuss current lending conditions.
• Update tenant affordability assessments considering recent interest rate changes.
• Plan tenant communications around remortgage or purchase intentions.

How Rentals & Sales Can Support You

Our expert team offers portfolio reviews, compliance audits, and pricing strategies designed to help you confidently navigate evolving market conditions. We also connect landlords with mortgage specialists and provide financial insights tailored to property investments.

Compliance Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. Landlords should consult qualified professionals before making investment or financing decisions.