As we move through July, there’s plenty for UK landlords to keep an eye on. From stable SWAP rates and lender pricing tweaks to strong regional rental yields and long-awaited leasehold reform updates, here’s what’s shaping the buy to let landscape this month.
Swap Rates Hold Steady – What This Means for Fixed Rates
SWAP rates have barely budged over the past fortnight. Two-year SWAPs are sitting at 3.56%, while five-year SWAPs are around 3.65%, slightly down from a month ago and significantly lower than last year.
While we’re not expecting dramatic changes, this stability is giving lenders room to make small downward adjustments to fixed-rate mortgage pricing. If you’ve been holding out for a big drop, it’s worth noting that the market may have already priced in any anticipated Bank of England Base Rate (BBR) cuts.
Lender Pricing: Small Cuts, Big Opportunities
Several lenders have recently made modest rate reductions. Clydesdale has reduced its rates by 0.15%. This is particularly beneficial for borrowers with strong incomes and minimal background debt, as their affordability model takes a holistic view of income and outgoings.
Paragon has also made reductions, trimming its two-year fixed rates by up to 0.15%.
Leeds Building Society has lowered some of its product transfer rates, so if you’ve recently applied for one, it’s worth checking whether you could benefit from the new pricing.
TSB and BM Solutions have also made cuts. TSB by 0.1% and BM Solutions by a more generous 0.3%. BM Solutions, in particular, stands out for its competitive pricing and flexible approach to property types, making it a strong option for many landlords.
Lastly, Foundation Home Loans has slightly reduced its Limited Company mortgage rates, offering a small but welcome improvement for incorporated landlords.
These changes are mostly from clearing banks, reflecting the current calm in SWAP markets. For landlords with more complex portfolios or limited company structures, there are still good deals to be found.
Current Mortgage Pricing Snapshot
Based on a typical MFB case of a £250,000 loan at 65% LTV, here’s where rates are sitting:
Personal Borrowers (Standard BTL):
- 2-year fix: from 3.92% with £1,499 fee
- 5-year fix: from 3.97% with 1% fee
- Tracker: from 4.68% with £1,495 fee
Limited Company Borrowers:
- 2-year fix: from 4.89% with £1,499 fee
- 5-year fix: from 5.04% with £1,499 fee
- Tracker: from 5.58% with £1,999 fee
Rather than choosing the ‘cheapest’ rates available, these are based on total cost over the term, including fees, to give a more realistic picture of value.
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GDP Down, Inflation Up – What’s Next for the Base Rate?
May’s GDP (Gross Domestic Product) fell by 0.1%, following a 0.3% drop in April. While the services sector is keeping things afloat, production and construction are dragging down overall growth.
This economic slowdown has prompted speculation that BBR could decrease in August, potentially by 0.25%. However, inflation unexpectedly rose to 3.6% in June, driven by food and transport costs. The Monetary Policy Committee (MPC) is now caught between supporting growth and controlling inflation. We’ll be watching closely.
Regional Rental Yield Data
Fleet Mortgages’ Q2 2025 Rental Barometer shows yields remain strong across England and Wales, with the national average at 7.5%. Here’s how the regions stack up:
- Wales: 9.0%
- North West: 8.8%
- North East: 8.7%
- Yorkshire & Humber: 7.9%
- East Midlands: 7.5%
- West Midlands: 7.2%
- South West: 7.1%
- South East: 6.5%
- East Anglia: 6.2%
- Greater London: 6.0%
While some regions like the North East and Greater London have seen slight dips, the overall picture is positive, especially for landlords focused on yield over capital growth.
Leasehold Reform: Progress at Last?
If you’re holding off on extending a lease, you’re not alone. Around 40% of PRS properties are leasehold, and many landlords are waiting for reform to reduce extension costs.
The good news? There’s been movement. A consultation on service charges and managing agent qualifications was released on 4th July. We’re also expecting updates on enfranchisement premiums and ground rent later this year.
If you’re sitting on a short lease (especially under 80 years), it’s worth speaking to us. Some lenders are still open to financing these properties, and we can help you navigate the options.
Need Advice? We’re Here to Help
Whether you’re reviewing your mortgage, expanding your portfolio, or navigating leasehold complexities, our team of specialist brokers is here to support you.
Call us on 0345 345 6788 or submit an enquiry.
