Landlords looking to expand their portfolios or to refinance existing properties will have been keeping a close eye on buy-to-let mortgage rates. In the current climate, it’s essential for landlords to focus on a careful balancing of costs when considering their buy-to-let strategy for the rest of 2025 and beyond.
With landlords facing huge changes ahead of the Renters’ Rights Bill and other regulation coming into force, many are choosing to leave the market. For those who can manage the extra regulatory burden and increased costs they will face, then expansion may be on the cards – particularly to take account of the void left by those who are exiting the market.
The latest cut in interest rates will help in such expansion or refinancing plans. At its August meeting, the Monetary Policy Committee voted 5-4 in favour of another 0.25 percentage points cut. However, it warned, at the same time, of increasing inflation, with forecasts of 4% inflation expected in September before falling back to the government’s 2% target.
Lenders are targeting buy-to-let investors
Greater availability of products will also help buy-to-let landlords. In June, the buy-to-let sector hit a new high for product availability according to Moneyfactscompare, with 4,144 deals available. It represented the highest number since November 2011, and an additional 1,209 deals compared to the same time last year. Lenders know that landlords face tough challenges and are launching an extended range of products to support them to invest.
They are also using deals to encourage landlords to comply with upcoming regulation early. Specialist lender, Fleet Mortgages, for example, recently reduced rates for products related to EPC A-C rating compliance.
Rates are falling
The increased product availability is accompanied by lower mortgage costs, too. In July, the average two-year fixed rate for buy-to-let mortgages fell below 5% as a range of lenders announced rates cuts. It marked the fourth consecutive month of mortgage rate cuts for buy-to-let deals. Such activity continued ahead of and following the latest MPC interest rate announcement.
A further cut to interest rates is anticipated at November’s meeting of the MPC but, as it has the rest of the year, the committee has urged caution and further 2025 rate cuts are by no means certain. For now, the cuts are positive news for new and existing landlords, whether they are expanding or simply refinancing portfolios. So long as interest rates continue to decrease, then buy-to-let rates should also fall. But, with uncertainty looming on the horizon, hopes of dramatic further falls in buy-to-let mortgage rates are unlikely to be realised. A considered strategy will be vital.
If you are considering your buy-to-let investment strategy then we can help. Get in touch with our team for expert advice on how to make the most of the opportunities ahead!
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0207 231 0002
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