With summer in full swing, landlords should be aware of key changes, including expected Base Rate cuts, more flexible lending for those with minor credit issues and a housing market showing strong buyer demand but slow price growth. These shifts could influence borrowing, rental yields and investment opportunities.
Swap Rate Update: Stability Offers Breathing Room
SWAP Rates have remained largely unchanged, with two- and five-year rates showing minimal movement month-on-month and year-on-year. This week saw a slight dip, influenced by improved GILT yields following weaker-than-expected job market data from the US. While not dramatic, this kind of market calm can reassure landlords.
The takeaway? Fixed mortgage rates are unlikely to shift significantly unless there’s a significant change in the Base Rate decision. For landlords considering their next move, this period of stability offers a valuable opportunity to secure rates without the pressure of sudden market swings.
Base Rate Expectations: Time to Act?
The Bank of England’s Monetary Policy Committee (MPC) is widely expected to reduce the Base Rate by 0.25%, with an 80% probability already priced into the markets. While this sounds promising, it’s unlikely to cause a significant drop in fixed mortgage rates, because lenders have already factored it in.
So, if you’re waiting for rates to fall before locking in a deal, you might be waiting in vain. In fact, if the MPC surprises us by holding or increasing the Base Rate, SWAP Rates could rise, and fixed rates with them.
Our advice? Secure a rate now. Most lenders allow you to switch to a lower rate without a penalty if one becomes available before completion. It’s a smart way to protect yourself from upward movements while keeping flexibility.
Find your next BTL mortgage rate here >>
Lender Pricing: Small Drops, Big Signals
We’ve seen a modest but welcome round of rate reductions from lenders, including NatWest, Santander, TMW, Paragon, and more. NatWest’s cuts of up to 0.3% stand out, though they may simply be adjusting after a surge in applications.
While SWAP Rates remain steady around 3.6–3.7%, lenders are cautiously adjusting pricing to stay competitive. It’s not a rate war, but it’s a sign that lenders are open for business, and that landlords may find better deals than they did a few weeks ago.
Lender Criteria: More Flexibility for Landlords
Lenders are beginning to show more flexibility in their criteria, which could be good news for landlords with less-than-perfect credit histories. For example, West One is now willing to consider applicants with small, satisfied County Court Judgments (CCJs), recognising that these issues can arise from simple oversights rather than financial irresponsibility.
They are also accepting day-one remortgages, with lenders more open to lending against the open market value of a property shortly after purchase, particularly when improvements have been made. This is a welcome shift for landlords looking to recycle capital quickly.
Another notable change is their growing willingness to support self-employed individuals who are first-time buyers and landlords. While affordability checks remain robust, lenders are beginning to assess whether the borrower genuinely intends to rent out the property rather than live in it.
These updates reflect a broader trend: lenders are adapting to real-world landlord scenarios and offering more tailored solutions.
Find your next BTL mortgage rate here >>
Housing Market Trends: Mixed Signals, Real Opportunities
Despite anecdotal reports of sluggish sales, national data tells a more optimistic story. Buyer demand is up 11%, agreed sales are up 8%, and relaxed affordability testing means buyers can borrow up to 20% more than they could three months ago.
However, house price growth remains subdued, just 1.3% year-on-year, with forecasts for 2025 revised down to 1%. The market is saturated, with 12% more homes for sale than last year, so sellers must price realistically.
This presents a golden opportunity for landlords, motivated sellers, negotiable prices, and rising rental yields. While short-term price growth may be slow, the long-term picture remains strong. Ten years ago, the average UK house price was £190,000. Today, it's £268,400. That’s a rise of over £78,000, despite economic turbulence. It’s a clear reminder that property remains a resilient and rewarding investment.
Rental Market: Strong Demand, Rising Yields
Rightmove’s latest rental tracker shows average advertised rents hitting a record £1,365 a month outside London, and £2,712 a month in the capital. With 15% more rental properties available and a 28% rise in rental home purchases, landlords are clearly re-engaging with the market.
At MFB, we’re seeing a shift from remortgages to purchase applications, which is proof that landlords are spotting value and acting on it.
Final Thoughts
If you’re a landlord wondering whether now’s the time to invest, refinance, or expand, our answer is yes, but with caution. The market is moving, and while rates aren’t plummeting, lender flexibility and rental demand are creating real opportunities.
Find your next BTL mortgage rate here >>
Next steps
Call us for tailored advice or help navigating the latest criteria. And don’t forget to sign up to watch our webinar on auction purchases on demand, an increasingly popular route for savvy investors.
Call us on 0345 345 6788
Email enquiry@mfbrokers.co.uk
Visit www.mfbrokers.co.uk
