The UK buy to let market continues to evolve at pace. Mortgage rates remain elevated, landlords are adapting to the abolition of Section 21, and property auctions are becoming an increasingly popular route for acquiring and disposing of investment properties.
This month's market update explores the key developments affecting landlords, investors and borrowers, together with the practical implications for those looking to grow, refinance or stabilise their portfolios.
Here’s your weekly MFB News update from 5th August 2026.
Why Are Mortgage Rates Still High?
Many landlords have been hoping to see fixed rates move lower during 2026. Unfortunately, recent market conditions have made this difficult.
The primary issue remains SWAP rates, which underpin the pricing of many fixed rate mortgages. While SWAP rates have stabilised recently, they remain significantly higher than they were both a month ago and a year ago. This continues to feed through into the mortgage market and limits lenders' ability to reduce pricing.
Several factors are contributing to this situation.
First, ongoing tensions in the Middle East have pushed oil prices higher, raising concerns about future inflation. Markets remain nervous that sustained energy price increases could force interest rates to remain higher for longer than previously expected.
Second, gilt yields have risen as investors assess the potential impact of higher energy costs on inflation and future Bank of England policy. Rising gilt yields often place upward pressure on SWAP rates and, by extension, mortgage pricing.
Finally, political developments have added another layer of uncertainty. Comments regarding fiscal flexibility and government spending have led some market participants to anticipate increased borrowing, resulting in further movement in gilt markets.
The combined effect of these factors is that fixed rate mortgages continue to feel relatively expensive compared to market expectations earlier in the year.
Lender Activity Has Started to Stabilise
While SWAP rates remain elevated, recent weeks have at least brought some stability.
Many lenders have reduced the frequency of repricing activity because their underlying funding costs have stopped moving significantly week to week. Although some lenders have implemented modest increases to fixed rates, the widespread upward repricing seen earlier in the year appears to have slowed.
For landlords approaching a remortgage or considering a portfolio acquisition, this provides a slightly more predictable environment, even if rates remain higher than many would like.
The Real Impact of Section 21 Abolition
The abolition of Section 21 continues to reshape landlord behaviour across the UK rental market.
Ahead of the deadline, many landlords rushed to submit possession claims while Section 21 remained available. This contributed to a significant rise in possession-related activity, with landlords seeking certainty before the legislation changed.
Now that Section 21 has gone, landlords are increasingly relying on formal grounds for possession when seeking to recover properties. Early data suggests arrears-related claims, intentions to sell and landlord occupation grounds are becoming the primary routes being used.
One of the key questions for landlords moving forward is how the courts will cope with demand. The effectiveness and speed of the possession process will play a vital role in determining how successfully the new framework operates in practice.
Rent Controls Remain a Major Concern
One of the most discussed topics within landlord communities recently has been the possibility of further rental sector intervention.
A report from a prominent policy group has renewed discussion around local rent controls and additional requirements surrounding landlord databases and reporting standards. The proposals have generated considerable debate among landlords, particularly regarding assumptions about profitability within the private rented sector.
Many landlords argue that headline profit figures often fail to reflect the true financial position of investors once mortgage costs, taxation, compliance requirements, licensing fees and ongoing maintenance obligations are taken into account.
This is particularly relevant following the introduction of Section 24 taxation changes, which continue to affect higher-rate taxpayers with personally held buy to let portfolios. Many landlords report that the gap between reported profits and actual cash flow remains poorly understood outside the sector.
While it remains unclear whether further regulation will materialise, landlords should continue to monitor developments closely and ensure their portfolios remain structured efficiently.
Why Property Auctions Are Becoming Mainstream
Property auctions have experienced significant growth and are no longer confined to niche investors and professional traders.
More than 29,000 properties were sold at auction during 2025, with auction volumes increasing substantially year on year. Increasingly, landlords and investors are viewing auctions as a practical alternative to traditional private treaty sales.
The reasons are straightforward.
Traditional sales can take months to complete and remain vulnerable to renegotiations, delays and transactions falling through altogether. Auctions bring certainty, fixed timescales and legally defined processes.
For landlords exiting the market, this certainty can be particularly attractive. For investors seeking opportunities, auctions often provide access to stock with redevelopment potential or assets that are less visible through conventional channels.
Modern Method vs Traditional Auctions
Understanding the difference between auction types is essential before bidding.
With a traditional auction, the fall of the hammer creates a legally binding commitment. Buyers typically pay a 10% deposit immediately and must complete within 28 days. This structure often appeals to cash buyers, experienced investors and those using bridging finance.
By contrast, the Modern Method of Auction operates on a conditional basis. Buyers pay a reservation fee and generally have 28 days to exchange contracts followed by a further 28 days to complete. This extended timeframe makes traditional mortgage finance far more achievable.
Each approach has advantages and drawbacks, so the most suitable route depends on individual circumstances, funding strategy and investment objectives.
Financing an Auction Purchase
One of the biggest misconceptions surrounding auction purchases is that mortgage finance cannot be arranged quickly enough.
In reality, both bridging finance and traditional mortgage solutions can work, depending on the auction type and the condition of the property.
For traditional auctions with a 28-day completion timetable, bridging finance often provides the greatest flexibility. Bridging lenders can move quickly, making them particularly useful when investors need certainty around completion deadlines.
However, modern auction purchases often provide sufficient time for a standard buy to let mortgage application to be processed successfully. This can create a more cost-effective route for investors who do not require the speed associated with bridging finance.
The Bottom Line for Landlords
The UK property market remains active, but the operating environment continues to evolve.
Mortgage rates remain heavily influenced by SWAP rates, global economic events and political uncertainty. Landlords are adapting to life after Section 21, while debates around rent controls and taxation continue to shape industry sentiment. Meanwhile, property auctions are becoming an increasingly important acquisition and disposal route for investors seeking certainty and opportunity.
For landlords reviewing their portfolio strategy, refinancing existing properties or considering future acquisitions, maintaining a proactive and flexible approach will be essential as the market continues to develop.
Next Steps
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