As we move through 2025, the UK property and mortgage markets continue to evolve, and for buy to let landlords, staying informed is more important than ever. From subtle shifts in SWAP rates to significant changes in HMO lending criteria, here’s what’s been happening and what it could mean for your investment strategy.
Inflation Holds, SWAP Rates Ease Slightly
Inflation held steady at 3.4% in May, matching April’s figure. While this wasn’t the drop many had hoped for, it has helped keep SWAP rates relatively stable. 2 and 5-year SWAPs are now at 3.68%, down slightly from last month. While a 0.1% drop won’t transform your mortgage repayments overnight, it signals a gentle downward trend, which we’ll watch closely.
Lender Pricing: Small Adjustments, Big Implications
It’s been a relatively quiet week on the lender pricing front, but there have been a few subtle yet noteworthy movements.
Keystone, a well-regarded specialist lender known for its flexible underwriting, has trimmed its rates by 0.1%. They remain a strong choice for landlords with complex portfolios or minor credit blemishes.
Meanwhile, Together has made a more significant adjustment, reducing rates by up to 0.65%. Although their pricing remains on the higher end, their willingness to consider a wide range of scenarios, including bridging finance and land loans, makes them a valuable option for more niche cases.
On the flip side, both Paragon and Landbay have increased their rates by 0.1%, reflecting the ongoing fluctuations in swap rates and funding costs.
While these changes may seem marginal, they highlight a market that’s still finding its footing. Even small shifts can influence the timing and structure of your next investment or refinancing decision.
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Lender News & Criteria Changes
MT Finance, traditionally known for its bridging and buy to let products, has expanded into the commercial mortgage space. Their new offering is designed to cater to a broad range of investor needs, with loan sizes starting at £100,000 and going up to £2.5 million. Terms are available from 5 to 30 years, offering up to 75% LTV on standard properties, or 70% for more specialist assets. Importantly, they’re open to lending to individuals, Limited Companies, LLPs, and even expats.
What sets this launch apart is MT Finance’s willingness to support sectors that many lenders currently avoid, most notably, hospitality. This is a welcome development in a market where pubs and similar businesses often struggle to secure funding. For landlords considering diversification into commercial property, this could be a well-timed opportunity to explore with a lender that takes a more flexible, case-by-case approach.
On another note, Yorkshire Building Society (YBS) has introduced a series of updates to its HMO lending criteria, making it easier for landlords to grow their portfolios. The maximum LTV has increased to 75% for HMOs with up to 6 bedrooms, up from 65%. Additionally, the maximum loan size has doubled to £3 million, and landlords can now finance HMOs with up to 20 rooms, an increase from the previous cap of 12. YBS has also raised its exposure limit, allowing landlords to borrow up to £10 million, compared to the previous £5 million ceiling.
These changes show confidence in the HMO sector and offer greater flexibility for landlords looking to scale their investments.
Property Market: A Buyer’s Market Emerges
The latest market data offers valuable insights for those considering buying or selling a property. Property listings are currently 6% higher than this time last year and 8% above pre-pandemic levels, indicating a strong supply of homes on the market. At the same time, price reductions have surged, with 32% more reductions than the 5-year average. This suggests that sellers are having to adjust expectations to attract buyers.
Sales agreed are also up by 8% year-on-year, showing that transactions are still happening, but often at negotiated prices. With over 750,000 homes currently available, the market is firmly tilted in favour of buyers. For sellers, this means being realistic on pricing is key, while buyers may find themselves in a stronger position to negotiate.
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Renters’ Rights Bill: What’s Coming
The Renters’ Rights Bill continues to move through Parliament, with its next key stage, the report stage and third reading in the House of Lords, scheduled for the 1st of July. This legislation proposes several major reforms that landlords should be aware of. Among the most significant are the abolition of Section 21, “no-fault” evictions and the introduction of mandatory periodic tenancies. The Bill also aims to tighten controls on rent increases and eliminate bidding wars between prospective tenants.
In addition, it proposes the creation of a national landlord and property database, alongside new anti-discrimination protections to prevent bias against tenants receiving benefits or those with children. Tenants would also gain the right to keep pets in rental properties, subject to reasonable conditions.
While the Bill may not become law until later this year, landlords are strongly encouraged to start preparations now. The changes will be introduced in phases, but they are expected to have a wide-reaching impact across the private rental sector.
Watch on demand: Navigating Labour’s Renters’ Reform Bill >>
HMO Investment: A Growing Opportunity
Recent data reveals that 77% of UK students prefer houses in multiple occupation (HMOs) over purpose-built student accommodation (PBSA). This preference has helped drive a 5% increase in rental growth within the HMO sector, which continues to benefit from strong domestic demand and a limited supply of suitable properties.
Since 2016, the UK has seen an increase of 160,000 undergraduates, and with positive demographic trends expected to continue, student HMOs are proving to be a resilient and profitable investment choice. This sector presents a compelling opportunity worth exploring for landlords considering their next move.
Final Thoughts
Whether expanding your portfolio, refinancing, or simply keeping an eye on the market, now is a great time to review your strategy.
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As always, every landlord’s situation is unique. If you’d like tailored advice or want to explore your options, call us at 0345 345 6788 or get in touch here.
