MFB News: Mortgage Rates, Landlord Trends and AI in Buy-to-Let

The last few weeks have been a reminder that mortgage rates don't exist in a vacuum.

While many landlords are focused on the next Bank of England base rate decision, developments elsewhere in the world are currently having a significant influence on mortgage pricing. At the same time, we're seeing interesting shifts within the private rental sector itself, with landlord portfolios continuing to grow, refinancing activity remaining strong, and artificial intelligence becoming increasingly embedded in property investment and management.

Here's what landlords should be paying attention to right now.

Recent escalations in the Middle East have led to higher oil prices and renewed concerns around inflation. As markets react to geopolitical uncertainty, we've seen global bond yields move upwards, with UK SWAP rates following suit. 

For buy-to-let landlords, this matters because SWAP rates play a key role in determining the cost of fixed-rate mortgage products.

Earlier this month, five-year SWAP rates briefly dipped below 4%, creating optimism that mortgage pricing would continue to improve. However, those gains have since reversed as markets respond to increasing uncertainty. 

The reality is that lenders fund fixed-rate mortgages using these wholesale money markets. When SWAP rates rise, lenders' costs rise too. Eventually, those costs are reflected in mortgage pricing.

One of the challenges landlords face at the moment is that there is no clear consensus on the future direction of interest rates.

Some forecasters believe the Bank of England could hold rates relatively steady through the remainder of the year, while others suggest further increases remain possible if inflationary pressures persist. Looking further ahead, projections for 2027 and beyond vary significantly, highlighting the level of uncertainty currently built into the market.

As mortgage brokers, we often get asked whether borrowers should choose a two-year fixed rate or a five-year fixed rate.

The honest answer is that nobody knows exactly where rates will be in two, three or five years' time.

Rather than attempting to perfectly time the market, landlords should focus on building resilience into their portfolio strategy. That means ensuring mortgage payments remain affordable under a range of scenarios and choosing products that support wider investment goals.

One particularly interesting dynamic in the market right now is the timing mismatch between lender pricing and SWAP rate movements.

Before the latest market volatility, a number of lenders had already reduced rates. Several major and specialist lenders introduced pricing cuts across buy-to-let and limited company mortgage products in response to lower funding costs.

However, funding costs have since increased again.

Some lenders have already begun withdrawing products and repricing, while others are still offering rates based on earlier market conditions.

For landlords who are currently refinancing, purchasing a property or approaching the end of a fixed-rate period, this may create a short-term opportunity to secure a mortgage product before further repricing occurs.

In periods like this, acting promptly can be just as important as finding the very lowest rate.

Despite frequent headlines suggesting landlords are exiting the sector, recent data paints a more nuanced picture.

The average landlord portfolio has grown to 7.3 properties, while the proportion of landlords describing themselves as full-time or self-employed investors has increased. 

This suggests we are seeing continued professionalisation within the private rental sector.

Rather than witnessing a wholesale landlord exodus, the evidence indicates that smaller or accidental landlords may be leaving while more experienced investors continue to expand and consolidate their holdings. 

For professional landlords, periods of market uncertainty can often create opportunities to acquire stock, strengthen cash flow and improve portfolio efficiency.

It's no surprise that refinancing continues to account for a large proportion of landlord mortgage activity.

With acquisition levels relatively subdued, many investors are focused on reviewing existing borrowing arrangements and improving funding structures across their portfolios. 

One statistic that stood out was that landlords with portfolios averaging more than seven properties typically use only two mortgage lenders.

While loyalty and familiarity can simplify administration, it's worth asking whether those arrangements still represent the best available options.

The buy-to-let mortgage market has become increasingly diverse, with specialist lenders, challenger banks and high-street providers often targeting different landlord profiles. Regular portfolio reviews can help identify opportunities to improve rates, reduce costs and access more suitable lending structures.

Another trend attracting attention is the growth of residential property auctions.

Auction sales increased significantly over the past year, while the wider residential sales market experienced a decline. London performed particularly strongly, with auction activity rising sharply. 

This isn't particularly surprising.

Many landlords appreciate the certainty, transparency and speed that auctions provide. Defined completion times and reduced risk of transactions collapsing can be attractive when compared with the traditional purchase process.

For investors willing to do their due diligence, auctions can also provide access to value-add opportunities that may not be available through estate agents.

Artificial intelligence is no longer a future concept for landlords.

It's already being used across the property market by buyers, investors, letting agents and tenants alike. 

For property investors, AI is proving particularly useful in several areas:

• Researching investment locations
• Analysing potential property deals
• Drafting landlord correspondence
• Reviewing compliance requirements
• Organising financial administration
• Managing portfolio data
• Responding to routine tenant enquiries 

Many landlords are already using AI to create tenant communications, draft notices, analyse investment opportunities and improve operational efficiency. 

That said, AI should still be treated as an assistant rather than an authority.

When it comes to live mortgage rates, complex legal requirements or time-sensitive financial decisions, professional advice remains essential. AI can support decision-making, but it should not replace expert guidance.

The buy-to-let market remains highly active despite ongoing economic uncertainty.

Mortgage rates continue to be influenced by global events, SWAP rates remain volatile, refinancing activity is strong, and professional landlords are continuing to grow their portfolios. At the same time, technology is creating new opportunities for landlords to operate more efficiently and make better-informed decisions. 

For landlords, the key message is simple: stay proactive.

Whether you're reviewing your mortgage arrangements, considering your next property purchase, exploring auction opportunities or looking at ways to incorporate AI into your business, taking action now could put you in a much stronger position as the market continues to evolve.