UK landlords face rising mortgage rates and potential new taxes. Discover key updates and regional insights to guide your property decisions.
SWAP Rate Trends
As we head into autumn, the UK buy to let mortgage market shows signs of turbulence. SWAP rates have increased slightly, with two-year SWAPs rising from 3.5% to 3.73% and five-year SWAPs from 3.62% to 3.79%. These movements, although modest, have prompted lenders to adjust their fixed mortgage rates. The Bond market has reacted negatively to speculation around the upcoming Autumn Statement, particularly concerning the UK’s investment appeal. If you plan to remortgage in the next 6–8 months, speak to a broker now to secure a new rate as soon as possible. You can always switch later, but locking in a deal gives you a safety net if mortgage rates continue to climb.
>> Explore the rates you could access here
NatWest Lending Criteria Changes
NatWest has updated its affordability assessment for buy to let mortgages. Letting agent fees are now automatically factored into their calculations, meaning landlords no longer need to declare these costs separately. While most lenders still base affordability on gross rental income, this move by NatWest could signal a shift in how lenders consider costs. This change simplifies the application process and may improve landlord confidence in navigating lender requirements.
Autumn Statement Tax Rumours
There is growing concern among UK landlords about potential tax changes in the upcoming Autumn Statement. Rumoured proposals include applying National Insurance (NI) to rental income, introducing Capital Gains Tax (CGT) on primary residences valued over £1.5 million, and replacing Stamp Duty with a national property tax for homes over £500,000.
A one-off sales tax and changes to Inheritance Tax thresholds and rates are also being discussed. These changes could significantly impact landlords, especially those with personally held properties. Many are considering Limited Company structures for estate planning to mitigate potential tax burdens.
>> For tax advice and planning you can trust, we recommend Comprehensive Tax Planning, which specialises in tax advice for landlords.
Regional Landlord Performance Insights
The Mortgage Works’ Q2 report provides valuable insights into landlord activity and confidence across the UK. Headlines include:
- The average rental yield nationwide is 6.5%, with the North West leading at 7.4%.
- The North East has the most active buyers, while the North West sees the most property sales.
- Rental arrears are highest in Wales and the East Midlands, and void periods are most common in the East Midlands.
- Confidence in rental yields is strongest in the East of England, while landlords in Wales report the lowest confidence in the UK economy.
- Profitability is highest in the East Midlands, with 90% of landlords making a profit, whereas Central London has the highest proportion of landlords making a loss.
These insights highlight a clear north-south divide in landlord experiences and underscore the importance of strategic investment decisions.
>> Explore the rates you could access here
Speak to mortgage maker
If you're unsure how these changes might affect your portfolio or future plans, we're here to help. As experienced mortgage brokers, we understand landlords' challenges and can guide you through your options. Whether you're refinancing, expanding, or restructuring, contact our expert team today.
Call us on 0345 345 6788 or submit and enquiry here and one of our team will call you back.
