Activity within the buy-to-let market is reviving after months of uncertainty and political interference, new official landlord lending data suggests.

UK Finance, the trade association for lenders, says the number of BTL loans made to landlords grew by 6.5% to 48,862 between July and September last year, its latest figures show, compared to the same period the year before.

The data also reveals that average gross yields increased for those who have invested in rental property to 6.93% from 6.53%, but sheds light on how exposed landlords are to rising interest rates.

For example, the number of BTL fixed rate mortgages outstanding was 1.4 million, 3.3 per cent up on a year previously.

In contrast, the number of variable rate loans outstanding fell by 14.9 per cent to 541,488, suggesting more landlords are fixing as economic uncertainty increases.

But some landlords are struggling, the data shows - 13,000 buy-to-let mortgages were in arrears greater than 2.5 per cent of the outstanding balance.

This was down 570 from the previous quarter but 19 per cent higher than in the same quarter a year previously, while 710 rental homes were repossessed by lenders during the period.

“The rise in arrears and possessions highlights the pressures many landlords are facing, with increasing costs and policy changes squeezing profitability,” says Oli Bland (pictured), Director of Lending at Black & White Bridging.

“While the decline in arrears compared to the previous quarter is a positive sign, it’s clear that the sector remains under strain. For landlords who are prepared to adapt, there are still viable opportunities, but the overall environment requires careful planning and a long-term perspective."