UK mortgage rates are falling, lenders are easing criteria, and tax changes loom. Here’s what landlords should know and how to prepare.
SWAP Rates: A Window of Opportunity
SWAP rates have continued their downward trend, with 2-year and 5-year SWAPs both falling by approximately 0.2% over the past month. This decline reflects a broader easing in lender funding costs, which could pave the way for more competitive mortgage pricing, though the full impact of Rachel Reeves’ recent economic speech remains to be seen.
Lender Pricing: Reductions Across the Board
Several lenders have responded to falling SWAP rates by reducing their mortgage pricing. Notable changes include
• HSBC: -0.15%
• Accord & YBS: -0.2%
• LendInvest and Paragon: Reductions of up to -0.15% on select products
These reductions are largely driven by improved capital market conditions and lender strategies to remain competitive while managing application volumes.
Lending Criteria: Bigger Loans, More Flexibility
Two lenders have made significant changes to their lending criteria, offering greater borrowing power and flexibility for landlords.
Molo Finance has increased its maximum loan per property, now offering up to £3 million for loans at up to 70% loan-to-value (LTV). For loans between 70%–75% LTV, the maximum is £2 million, and for higher LTVs (up to 80%), the cap is £750,000. These changes make Molo a more competitive option for landlords with larger or more complex property investments.
The Mortgage Works (TMW) has also raised its maximum loan amounts, now offering up to £2 million for buy to let and Limited Company applications, and £1 million for let-to-buy cases. In addition, TMW has increased its group exposure limit (the total amount a borrower can have across the Nationwide Group, which owns TMW) to £75 million. This is a notable move that could benefit portfolio landlords looking to scale their investments with a single lender group.
These updates reflect a broader trend of lenders reassessing their criteria to better support the evolving needs of UK landlords.
Search thousands of buy to let mortgage rates here >>
Housing Market: A Pause Before the Push
The latest Home Track report reveals a cooling in market activity as buyers adopt a cautious approach ahead of the Autumn Statement. Buyer demand has dropped by 8% year-on-year, while the number of sales agreed is down 3%, marking the first annual decline in two years.
Despite this slowdown, UK house price inflation remains steady at 1.3%. However, this national average masks significant regional disparities: while prices in southern England have largely plateaued, areas such as Scotland, Wales, and northern England have seen growth exceeding 2%.
An increase in housing supply, up 7% compared to last year, is giving serious buyers more choice. As a result, the average time to sell has risen to 37 days, a 10% increase year-on-year. This shift underscores the importance of realistic pricing for sellers looking to secure a sale in a more competitive environment.
For landlords and investors, this period of uncertainty could present opportunities. With many buyers holding off until after the Autumn Statement, those ready to act now may benefit from softer pricing and less competition.
Search thousands of buy to let mortgage rates here >>
Tax Changes: What Landlords Should Watch For
The upcoming Autumn Statement could bring significant tax reforms that may impact landlords, particularly those holding properties in their personal names. Key areas under consideration include:
National Insurance on Rental Income - Currently exempt, rental income may soon be subject to National Insurance contributions. This would increase the overall tax burden on personally held properties.
Capital Gains Tax (CGT) Adjustments - While CGT rates on residential property (18% or 24%) remained unchanged in the last budget, there is speculation that allowances could be reduced or CGT could be extended to main residences above a certain value threshold.
Broader Property Tax Reform - The government is reportedly exploring a shift from stamp duty and council tax to a more comprehensive land or property tax. This could affect long-term property ownership, especially for high-value assets.
These potential changes could significantly alter the financial landscape for landlords, making it essential to stay informed and proactive.
Read the full details of all the changes included in the new Act here>>
How Landlords Can Prepare
With uncertainty ahead, landlords should consider taking the following steps to safeguard their portfolios:
Review Ownership Structures: Evaluate whether holding properties in a Limited Company could offer tax efficiencies, especially if National Insurance is applied to personal rental income.
Consider Incorporation: While incorporation involves upfront costs and higher corporate tax rates, it may still offer long-term benefits, particularly in shielding income from personal tax hikes.
Watch our webinar to learn more about BTL Incorporation & Landlord Tax >>
Instead of acquiring new properties, explore ways to enhance the value and yield of current holdings. This could include:
• Converting single lets into HMOs (Houses in Multiple Occupation)
• Switching to holiday lets, especially in high-demand areas
• Splitting properties into flats or making energy-efficient upgrades
Plan for Holiday Let Tax Changes: The government is aligning holiday let taxation more closely with standard rental property rules, so reassess your business model accordingly.
Seek Professional Advice: Engage with tax advisors, accountants, and solicitors to understand the implications of potential reforms and to develop a tailored strategy.
Being proactive now could help mitigate the financial impact of future tax changes and position your portfolio for long-term resilience.
Next Steps
Staying informed is key to making confident decisions in today’s mortgage market.
For tailored advice call us on 0345 345 6788 or submit an enquiry here and one of our team will call you back.
