With the mortgage market in flux, UK landlords are navigating a blend of stability, subtle shifts, and global pressures. In this week’s update, Jeni unpacks the latest on SWAP rates, lender repricing, evolving lending criteria, and London’s unexpected return as the UK’s top investment hotspot.
SWAP Rates: Calm Before the Base Rate Storm?
SWAP rates remain remarkably stable. Two-year SWAPs are sitting at 3.63% (down from 3.68% a month ago), and five-year SWAPs are at 3.69% (down slightly from 3.7%). While these figures are a marked improvement year-on-year, the month-on-month movement is minimal.
This stability reflects the capital markets’ current outlook: They’ve priced in expectations for the Bank of England’s Base Rate over the remainder of the year, and there’s little new data to shift that view. So, if you’re waiting for the August Base Rate meeting in hopes of a cheaper fixed rate, be aware that it’s likely to be already priced in.
Find your next BTL mortgage rate here >>
Lender Pricing: A Quiet Summer Shift
The UK is firmly in holiday mode, and that’s reflected in lender activity. A few specialist lenders, including MT Finance and Aldermore, have nudged their rates up by 0.1%. Meanwhile, Skipton and Accord (part of the Yorkshire Building Society Group) have reduced theirs by up to 0.15%.
This divergence highlights the difference in how lenders are exposed to capital markets. Specialist lenders, more sensitive to SWAP rate fluctuations, are adjusting accordingly. High street lenders, with more flexibility, are easing rates slightly. But overall, it’s a quiet period, and we don’t expect significant changes until later in the summer.
Lending Criteria: Virgin Money Opens Doors for Foreign Nationals
Virgin Money has updated its lending criteria for foreign nationals. They’ll now lend up to 80% LTV on buy to let mortgages where one applicant is a foreign national, provided at least one applicant is an owner-occupier. If neither applicant has indefinite leave to remain, one must earn at least £75,000 annually.
This is a welcome move for overseas investors looking to establish themselves in the UK property market. And if you’re struggling to find a lender due to visa status or residency, don’t worry, there are still options. Lenders like Hampshire Trust Bank (HTB) can even support non-UK residents living abroad.
Trump’s Tariffs: A Global Move with Local Consequences
Donald Trump's reintroduction of global tariffs is expected to have a ripple effect on UK inflation. With a 20% average tariff on imports and a reciprocal 10% UK rate, sectors like steel, cars, and pharmaceuticals are particularly exposed.
The result? Rising input costs for UK manufacturers, which could be passed on to consumers, are adding pressure to domestic inflation. The OECD warns that UK growth could slow to 1% in 2026, with inflation potentially rising by 0.5%-1%. This complicates the Bank of England’s decision-making: lower rates could stimulate growth, but risk fuelling inflation.
Base Rate Outlook: One More Cut?
Market consensus suggests we may see one more Base Rate cut in 2025, possibly in August, but little movement beyond that. With inflation still above target and global pressures mounting, the Monetary Policy Committee (MPC) faces a tough balancing act.
London: Back on Top for Property Investment
In a surprising twist, London has reclaimed its position as the UK’s top city for property investment in 2025. According to Handelsbanken’s latest report, 46% of professional landlords now see the capital as the most attractive region.
Why the shift? While yields remain lower than other regions, London offers strong tenant demand, minimal void periods, and long-term capital growth. The East of England and Southeast also remain popular, but London’s resilience and stability are winning investors back.
Find your next BTL mortgage rate here >>
Renters’ Rights Bill: Delayed but Still Coming
The Renters’ Rights Bill won’t reach Royal Assent this summer; it’s now expected in autumn. While some amendments have been voted on, the core of the Bill remains unchanged. One notable update is the introduction of additional deposits for tenants with pets, addressing landlord concerns around property damage.
If you’re not yet familiar with the Bill, now’s the time to brush up. It will affect all landlords, and staying informed is key to staying compliant.
Read more about the Renters’ Rights Bill here >>
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