While buy to let mortgage costs for landlords have eased to their lowest levels in nearly three years, landlords remain under pressure from tighter rules, rising repossessions and the prospect of new tax measures in the Autumn Budget, one financial platform warns.
According to Moneyfactscompare.co.uk, the average two-year fixed BTL rate now stands at 4.88%, down from 6.64% last year, while the typical five-year option has dropped to 5.21%.
At the same time, the number of available products has surged to 4,597, the highest since records began in 2011.
There are still more five-year fixed deals than two-year fixed deals with loan-to-value tiers showing record volumes of deals at 80% and 75% LTVs, both for two- and five-year fixed options.
Landlords wanting BTL remortgages
The platform’s finance expert, Rachel Springall, said: “Landlords looking to refinance or entering the market may be encouraged to see that buy to let rates have dipped to their lowest levels since September 2022, both for either a two- or five-year fixed term.
“Those landlords who locked into a fixed rate deal in 2023 and are due to refinance will find the average two-year fixed rate has fallen from 6.64% to 4.88%, and the rate has edged slightly lower than 5% since the start of June 2025 (4.98%).”
She added: “However, uncertainties on the path of interest rates, and the changes to mortgage interest tax relief embedded by April 2020, meant some landlords would have grabbed a five-year fixed deal for peace of mind.
“In September 2020, the average five-year fixed rate was 3.20%, but today the difference in rate is around 2% more, at 5.21%.”
Landlords are under pressure
Ms Springall warns that tax reforms, including speculation over National Insurance Contributions being applied to rental income, could make limited company structures increasingly attractive.
She said: “The mounting pressure on landlords is stark, as recent figures from UK Finance revealed buy to let mortgage repossessions are up by 11% year-on-year.
“Not only this, but there are growing reasons for landlords to seriously consider leaving the market, or to reduce their portfolio.
“A record 26% of landlords sold at least one property in 2024 while just 8% of landlords bought, according to a survey from the National Residential Landlords Association.”
Also, the Renters’ Rights Bill which could become this month could add further challenges with the abolition of Section 21 ‘no-fault’ evictions and tightening property standards.
Landlords leaving the PRS
Megan Eighteen, the president of ARLA Propertymark, said: “Landlords leaving the market is a continuous trend and is pushing up rents for tenants due to a growing supply and demand imbalance.
“Ultimately, it’s positive to see there is a glimmer of hope for those landlords looking to take out a buy to let mortgage as they become the most affordable they’ve been in years.”
She adds: “However, successive governments have placed pressure on many other areas of a landlords finances for decades, and with the news of yet another blow for investors due in the upcoming Budget, the future of the private rented sector is concerning.”
Ms Eighteen went on to say that rental supply shortages are the biggest issue and: “We need to value every part of our housing ecosystem as the fundamental issue to tackle is the lack of homes for the nation.
“Many people rely on their rental home and if we’re not careful in ensuring a healthy and sustainable mix of homes of all tenures, many could find it increasingly difficult and unaffordable when looking to move.”
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