In this week’s update, Jeni explores the latest Bank of England Base Rate decision and why markets are signalling that mortgage rates could stay higher for longer. She also breaks down rising SWAP Rates, shifting rental demand, and the immediate impact of the Renters’ Rights Act changes on landlords.
Here’s your weekly MFB News update from 29th April 2026.
Base Rate Held: What It Means for Landlords
The Bank of England has held the Base Rate at 3.75%, and while that may sound like stability on the surface, the underlying message is clear: inflation is proving stubborn, and higher interest rates could be here for longer.
For buy to let landlords, this creates a challenging but familiar environment. Borrowing costs remain elevated, and there’s a growing expectation that rates could rise further if inflationary pressures persist, particularly given ongoing global economic uncertainty.
This isn’t a short-term blip. Markets are increasingly pricing in a “higher-for-longer” interest rate environment, meaning you should be planning ahead rather than waiting for meaningful rate cuts.
SWAP Rates: The Real Driver Behind Mortgage Pricing
If you’re tracking mortgage rates, SWAP rates are where the real story sits.
Currently, 2- and 5-year SWAP rates are sitting at around 4.2%, noticeably higher than earlier in the year. This reflects market expectations that Base Rates will not fall anytime soon and may even increase further.
In practical terms, this means:
- Mortgage rates are unlikely to drop significantly in the near term
- Any lender rate reductions are likely to be limited and strategic
- Product pricing is being driven by funding costs, not competition alone
For landlords refinancing or expanding portfolios, this reinforces the importance of timing and product selection in a relatively static pricing environment.
Rental Market Trends: Demand Remains Strong
Recent data shows that average UK rents (£1,547) are now lower than average mortgage payments (£1,670), a reversal of typical trends. While this reflects higher borrowing costs for homeowners, it’s driving more tenants into the rental sector.
For landlords, that translates into:
- Sustained tenant demand, particularly outside London
- Reduced void periods in many regions
- Continued upward pressure on rental yields
The imbalance between affordability and home ownership is reinforcing the long-term strength of the private rental sector.
>> Search thousands of buy to let mortgages here.
Renters’ Rights Act: What Landlords Must Do Now
Alongside market pressures, legislative changes are set to have a significant impact.
The Renters’ Rights Act introduces several key reforms that every landlord needs to understand:
- Periodic Tenancies Become Standard: Fixed-term tenancies are being phased out in favour of rolling, periodic agreements. This gives tenants greater flexibility, while requiring landlords to adapt how they manage tenancies.
- Section 21 Abolished: “No-fault evictions” will no longer be permitted. Landlords must now rely on specific, legally defined grounds for possession, such as selling the property or tenant breach.
- Increased Compliance Requirements: Documentation and record keeping are becoming critical. Landlords must be able to evidence:
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- Proper notice procedures
- Tenant communication
- Compliance with all legal requirements
Failure to do so could lead to delays, legal challenges, or financial penalties.
- Tenant Rights Extended
- Tenants now have stronger rights, including:
- The ability to request pets (with reasonable grounds required for refusal)
- Greater protection against eviction
- New mandatory information requirements
A key deadline to be aware of is the requirement to provide tenants with the official government information sheet; failure to comply could result in penalties.
>>Visit our Renters’ Rights Hub to find out more
Lender Criteria Changes: More Flexibility at Lower Values
On a more positive note, there has been a notable shift in lender criteria.
Family Building Society has reduced its minimum property value requirement from £120,000 to £75,000, opening up more options for landlords investing in lower-value properties.
This change reflects evolving market conditions but also highlights ongoing lender caution. Lower-value properties are typically seen as higher risk due to:
- Reduced resale demand
- Limited comparable valuation data
- Greater volatility in local markets
Even so, this move increases flexibility for landlords targeting higher-yield, lower-cost investments, particularly in regional markets.
Wider Market Updates Landlords Should Be Aware Of
A couple of additional developments are worth noting:
- Leasehold reform delays mean significant changes are unlikely in the near term
- Proposed rent caps have been ruled out, offering reassurance to landlords concerned about income restrictions
Together, these updates provide some stability, even as other areas of the market continue to evolve.
Final Thoughts: A Market That Requires Planning, Not Guesswork
The current landscape for UK buy to let landlords is defined by 2 key forces: sustained higher borrowing costs and increased regulatory oversight.
While this presents challenges, it also reinforces the importance of:
- Strategic mortgage planning
- Careful portfolio management
- Staying fully compliant with legislative changes
Demand for rental property remains strong, and opportunities still exist, but success in this market will come down to being informed, proactive, and adaptable.
If you’re unsure how these changes affect your position, speaking to an experienced broker can help you navigate both the financial and regulatory landscape with confidence.
Speak to an expert
Whether you're approaching the end of your fixed rate, looking to raise capital, or want to review your portfolio strategy, our experts can help. We’ll offer you tailored advice to ensure we find you the best rates to suit your needs and help you make fully informed property-investment decisions. Call us on 0345 345 6788 or submit an enquiry here.
