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Category: Buy to Let

  • Impact of Proposed UK Holiday Tax on the Mortgage Market

    Impact of Proposed UK Holiday Tax on the Mortgage Market

    Proposed UK Holiday Tax: The Facts

    As of 16th April 2026, the Confederation of British Industry (CBI) has warned that a proposed English holiday tax could cost the UK an additional £500 million. The Government is planning to introduce a vacation tax authority to Mayoral Strategic Authorities. This would allow mayors and town officials to impose overnight visitor levies on hotels, short-stay accommodations, and bed and breakfast visitors. Manchester expects to generate £3.8 million each year from this tax, while Liverpool projects £939,000. Since 2023, Manchester’s Accommodation BID zone has been adding £1 a night per room/unit to guest’s stays, directing the funds towards tourism marketing campaigns, large-scale events, conferences, festivals, and improving guest welcome and street cleanliness. Hospitality UK has stated that a two-week vacation could cost up to £100 more under this potential holiday tax.

    Real-World Impact on Mortgage Holders

    Let’s consider the case of a landlord owning a £200,000 interest-only BTL property in Manchester. Under the proposed tax, the landlord could see an increase in costs due to the potential reduction in demand for short-term rentals. If the tax leads to a 10% decrease in occupancy rates, this could result in a loss of £2,000 in annual rental income. This loss would increase the landlord’s monthly costs from £917 to £1,083, an increase of £166 per month.

    For a first-time buyer considering purchasing a £250,000 property for short-term rental purposes, the proposed tax could also have significant implications. If we assume a 75% LTV, the monthly repayments would be £1,432. However, if the tax results in a 10% decrease in occupancy rates, the buyer could see a reduction in rental income of £2,500 per year. This decrease in income would effectively increase their monthly costs from £1,432 to £1,641, an increase of £209 per month.

    Market Context and Implications

    The current base rate is 3.75% as of April 2026. If the proposed tax is implemented, it could potentially lead to a decrease in demand for short-term rental properties. This could, in turn, lead to a decrease in property values in areas heavily reliant on short-term rentals, such as holiday destinations. A decrease in property values could potentially impact the LTV ratios for mortgage holders, potentially leading to higher interest rates for those with higher LTV ratios.

    For the BTL market, the proposed tax could lead to a decrease in demand for BTL mortgages if landlords anticipate a decrease in rental income due to the tax. This could potentially lead to a decrease in competition among lenders, potentially leading to higher interest rates for BTL mortgages.

    For first-time buyers considering entering the short-term rental market, the proposed tax could potentially make it less attractive due to the potential decrease in rental income. This could potentially lead to a decrease in demand for properties suitable for short-term rentals, potentially leading to a decrease in property values in these areas.

  • Buy-to-Let Repossessions Surge Amid Rising Mortgage Rates

    Buy-to-Let Repossessions Surge Amid Rising Mortgage Rates

    Buy-to-Let Repossessions and Mortgage Rates on the Rise

    As of 16th April 2026, the UK buy-to-let (BTL) market is facing significant challenges. The latest data from UK Finance reveals that BTL repossessions have risen by 10% in the last quarter of 2025, compared to the same period in 2024, with 770 cases reported. This comes at a time when landlords are grappling with higher mortgage repayments. Analysis by Moneyfactscompare shows that landlords who took out a BTL mortgage in mid-April 2026 face repayments of approximately £1,300 more per year compared to the start of March. This is based on borrowing £250,000 over 25 years at an interest rate of 5.45%, up from 4.66% in early March.

    The surge in mortgage rates follows the outbreak of conflict in the Middle East on 28 February 2026, which has fuelled expectations of a potential inflation surge. The current base rate stands at 3.75%, indicating a significant increase in borrowing costs for landlords.

    Real-World Impact on Landlords

    Let’s consider a landlord with a £250,000 BTL mortgage at 75% loan-to-value (LTV) ratio. The increase in the interest rate from 4.66% to 5.45% means their annual repayments would rise from £11,650 to £13,625, an increase of £1,975 per year or approximately £165 per month. This could significantly affect their rental yield and overall profitability, especially if rental income remains stagnant.

    Separate data from property portal Rightmove shows that monthly rents outside Greater London remained at £1,370 in Q4 2025 and the first three months of 2026. This stagnation in rental growth, combined with rising mortgage costs, is likely to squeeze landlords’ margins.

    Wider Market Context

    The wider rental market is also showing signs of strain. Rightmove’s data reveals that 26% of rental listings saw a price reduction in the first three months of 2026, the highest proportion at this time of year since 2012. This is attributed to slowing wage growth, inflation above 2%, and an increase in the supply of rental properties, which is up 3% from the same time in 2025.

    Despite these challenges, there are some positive indicators. The number of new BTL loans taken out in the last quarter of 2025 rose by 18% compared to the same period in 2024, according to UK Finance. Additionally, the average rental yield increased to 7.18% in Q4 2025, up from 6.99% in the same quarter in 2024.

    However, landlords will need to navigate new challenges with the Renters’ Rights Act rules coming into force from 1 May 2026. To remain profitable in this challenging market, landlords will need to carefully manage their costs and stay abreast of regulatory changes.

  • Stagnant Rents Outside London: Impact on Landlords and Borrowers

    Stagnant Rents Outside London: Impact on Landlords and Borrowers

    Stagnant Rents Outside London: A Detailed Overview

    As of April 2026, average rents outside London have flatlined for the first time since 2017, with prices failing to rise between Q4 2025 and Q1 2026. Data from Rightmove reveals that advertised rents remained unchanged at £1,370 per calendar month in Q1. However, they are still 1.6% higher than a year earlier, marking the slowest annual growth since 2018. In contrast, rents in London continued to edge upwards, rising by 0.7% over the quarter to £2,736 per month, although remaining below the peak seen in Q3 2025.

    The number of homes available to rent is now 3% higher than a year ago, reaching its highest level for this time of year since 2021. Despite the upcoming Renters’ Rights Act coming into force on 1 May, there has been no surge in new listings. New rental properties in March were down 6% compared with a year earlier. The average rental property now receives eight enquiries, down from 11 a year ago and significantly lower than the peak of 29 recorded in 2022.

    Impact on Landlords: A Worked Example

    Consider a landlord with a £200,000 interest-only buy-to-let (BTL) mortgage. With the average two-year rate for a landlord purchasing with a 25% deposit now at 5.79%, up from 4.86% prior to the Iran conflict, their monthly cost would rise from £805 to £963. This increase in borrowing costs, coupled with stagnant rents, could squeeze their profit margins.

    For instance, if they were charging the average rent of £1,370 per month, their annual rental income would be £16,440. With the new mortgage rate, their annual mortgage cost would be £11,556, leaving them with a profit of £4,884 before tax and maintenance costs. This is a significant reduction from the £6,780 profit they would have made with the previous mortgage rate.

    Market Context and Implications

    Recent lending data suggests some support for supply, with UK Finance reporting that the total number of buy-to-let loans was 14% higher at the start of 2026 compared with the start of 2025, including an 18% rise in remortgages year-on-year. However, this data only covers January and predates recent increases in borrowing costs.

    Rightmove suggests that rising buy-to-let mortgage rates since the outbreak of the war in Iran are adding further pressure on landlords. This, coupled with the stagnant rents outside London, could potentially lead to a more challenging environment for landlords. Furthermore, with 26% of rental listings seeing a reduction while advertised – the highest proportion recorded by Rightmove since it began tracking the measure in 2012 – landlords may need to be more competitive with their pricing.

    For borrowers, the current base rate of 3.75% may also impact mortgage affordability. With the base rate expected to rise, borrowing costs could increase further, which may affect both landlords and homeowners. This could potentially lead to a slowdown in the property market, particularly in the buy-to-let sector.

  • Buy-to-Let Lending Grows in Q4 2025: Real World Impact on UK Landlords

    Buy-to-Let Lending Grows in Q4 2025: Real World Impact on UK Landlords

    Buy-to-Let Lending Surges in Q4 2025

    As of April 2026, the UK buy-to-let mortgage market has experienced significant growth in the final quarter of 2025. According to UK Finance, a total of 59,489 new buy-to-let loans were advanced in the UK between October and December 2025, worth £11.2bn. This represents an increase of 18.2% by number and 21.3% by value compared to the same period in 2024. The average gross rental yield rose to 7.18% in Q4 2025, up from 6.99% a year earlier. In addition, the average interest rate on new buy-to-let loans fell to 4.77%, down eight basis points from the previous quarter and 32 basis points lower than Q4 2024.

    Real World Impact on Landlords

    Let’s consider a landlord with a £200,000 interest-only buy-to-let mortgage. With the average interest rate falling to 4.77%, their monthly cost drops from £917 to approximately £875. This translates to a saving of £42 per month or £504 per year. Furthermore, the average gross rental yield increase to 7.18% means that a landlord with a property worth £250,000 could expect an annual rental income of £17,950, up from £17,475 in 2024. This is an additional income of £475 per year.

    Additionally, the number of fixed-rate buy-to-let mortgages outstanding increased by 2% year-on-year to 1.46 million, while variable-rate loans fell by 9.8% to 466,000. This reflects a continued shift towards fixed-rate products. If a landlord with a £200,000 mortgage switched from a variable rate to a fixed rate, they could potentially lock in the lower interest rate, providing more certainty over future repayments.

    Arrears and Possessions

    The number of buy-to-let mortgages in arrears of more than 2.5% of the outstanding balance fell to 9,520, down by 910 compared with Q3 2025. However, possessions rose to 770 cases, a 10% increase from 700 in Q4 2024. This shows that while overall financial stability may have improved for landlords, there are still those facing difficulties.

    Market Context and Future Implications

    It’s important to note that the growth in buy-to-let lending has been largely driven by landlords refinancing existing loans rather than new investment. This suggests that while the buy-to-let market is currently robust, new demand for buy-to-let purchases remains fragile, having fallen slightly in Q4 2025 compared to a year ago.

    With the current base rate standing at 3.75%, the falling interest rates seen in Q4 2025 have now reversed. This could potentially dampen the growth in buy-to-let remortgaging. However, the falling borrowing costs in Q4 2025 pushed up the average interest cover ratio to 218%, compared with 201% a year earlier, indicating that landlords are in a better position to cover their mortgage interest payments.

  • UK Construction Output Falls: What it Means for Mortgage Holders

    UK Construction Output Falls: What it Means for Mortgage Holders

    Construction Output Decline Continues

    As of 16th April 2026, UK construction output has fallen for the fifth consecutive quarter, according to the latest figures from the Office for National Statistics (ONS). The ONS reported a 2% drop in total construction output in the three months to February 2026, continuing the trend from the previous quarter, which also saw a 2% fall. The decline was largely attributed to a reduction in new work, which fell by 3.4% over the period. Six out of nine construction segments witnessed a drop in output, with private new housing taking the biggest hit, falling by 6.5%. However, there was a small recovery in February, with construction output increasing by 1% after a 0.5% rise in January and a 1.3% drop in December. This rise was driven by a 1% increase in new work and a 0.9% rise in repair and maintenance.

    Impact on First-Time Buyers

    For first-time buyers, this decline in construction output could potentially lead to a decrease in the availability of new homes. Let’s consider a first-time buyer with a £250,000 repayment mortgage at 75% LTV. With the current base rate of 3.75%, their monthly payments would be approximately £1,167. If the supply of new homes continues to decrease, it could lead to an increase in property prices. Assuming a 2% increase in property prices, the same property would now cost £255,000. This would increase the monthly payments to approximately £1,191, an additional £24 per month or £288 per year.

    Effects on the Remortgage Market

    For those looking to remortgage, the falling construction output could have a different impact. A homeowner with a £200,000 repayment mortgage at 75% LTV, currently paying around £933 per month, may find that the value of their property has increased due to the reduced supply of new homes. If their property value increases by 2%, their equity would also increase, potentially allowing them to secure a lower LTV ratio and a better interest rate when remortgaging. For example, if they could reduce their LTV to 70%, their monthly payments could decrease to around £891, saving them £42 per month or £504 per year.

    Overall Market Context

    The current trend of falling construction output comes at a time when the UK base rate stands at 3.75%. This is higher than the rate six months ago, which was 3.5%. The reduction in new work and the subsequent potential increase in property prices could put additional pressure on the Bank of England to raise the base rate further to control inflation. This could lead to higher mortgage rates for both first-time buyers and those looking to remortgage. However, the small recovery in construction output in February, driven by increases in new work and repair and maintenance, could signal a potential turnaround in the coming months.

  • UK Rental Market Stability Amid Rising Buy-to-Let Mortgage Rates

    UK Rental Market Stability Amid Rising Buy-to-Let Mortgage Rates

    UK Rental Market Trends in Q1 2026

    As of April 2026, the average advertised rent for homes outside London has remained steady from Q4 to Q1 at £1,370 per month, marking the first time since 2017 that rents have not increased quarter on quarter. In contrast, within London, rents rose by 0.7% from Q4 2025 to Q1 2026, reaching £2,736 per month, according to the latest index from Rightmove. Year on year, average rents outside of London are still 1.6% higher, and within the capital, they have risen by 1.4%.

    The average rental home now receives eight enquiries, down from 11 a year ago and significantly lower than the 29 at the 2022 peak. More than a quarter of rental listings have had their price reduced, the highest proportion for this time of year since Rightmove began recording this metric in 2012. Despite these changes, Rightmove reports no major signs of shifts in market dynamics ahead of the Renters’ Rights Act coming into effect on May 1, 2026.

    Supply and Demand in the Rental Market

    The number of available homes to rent is now 3% higher than a year ago, with supply at its highest level for this time of year since 2021. Despite the increase in supply, demand remains strong, with Chestertons head of residential Adam Jennings noting a clear pick-up in lettings activity, particularly towards the end of March 2026, with a noticeable increase in viewings and agreed lets.

    Impact of Rising Buy-to-Let Mortgage Rates

    The average two-year buy-to-let mortgage rate for a landlord with a 25% deposit is now 5.79%, up by 93 basis points from 4.86% before the war in Iran started. To put this into perspective, a landlord with a £200,000 interest-only buy-to-let mortgage would see their monthly cost rise from £810 to £965, an increase of £155 per month or £1,860 per year. This significant increase in borrowing costs for landlords may filter through to the market at a later stage, potentially putting upward pressure on rents.

    Market Outlook Amid Regulatory Changes and Global Events

    With the Renters’ Rights Act coming into force from May 1, 2026, there has understandably been some uncertainty among landlords. Despite this, the strength of demand seen in late March 2026 has provided reassurance, with many landlords continuing to see competitive levels of interest and strong rental values. The impact of the war in Iran on borrowing costs and the forthcoming Renters’ Rights Act will be key factors to watch in the coming months, as they could both have significant implications for the UK rental market.

  • UK Landlord Exodus Slows as Rental Sell-Offs Plunge

    UK Landlord Exodus Slows as Rental Sell-Offs Plunge

    Landlord Exodus Slows Down

    As of April 2026, the proportion of landlords selling off their former rental properties has nearly halved in the past year, indicating a slowdown in the wave of buy-to-let exits that has marked the private rented sector in recent years. This is according to the latest Property & Homemover Report from TwentyCi. The percentage of homes coming to market that were previously rented dropped from 22.5% in Q1 2025 to 12.4% in Q1 2026, representing a year-on-year reduction of 45%. This decline was observed across the UK, with London recording the most significant fall of 51%.

    Of the properties sold in Q2 and Q3 2025, only 6% outside London were subsequently re-let, rising to 11% in the capital. This suggests that most are likely being absorbed by owner-occupiers rather than other investors.

    Broader Housing Market Stability

    The broader housing market has made a relatively stable start to 2026. New listings have increased by 5.1% year-on-year. Transactions were down 3.9% compared with last year but up 10.7% on Q1 2023 and 19.2% on Q1 2024, once the distorting effect of last year’s stamp duty deadline is taken into account. Colin Bradshaw, chief executive of TwentyCi, stated that the market was ‘continuing to tick along nicely’ despite global disruption. However, he noted some initial cooling in London and the South East as fixed mortgage rates have moved back above 5%.

    Buyer enquiries fell sharply in March, mortgage pricing has become more volatile, and inflation concerns are prompting the Bank of England to hold rates rather than cut. The report expects transactions in 2026 to be broadly similar to 2025 – around 1.2 million – but said the outlook depends on whether geopolitical pressures have a wider economic impact.

    Lettings Market Overview

    In the lettings market, the number of rental properties coming to market rose by nearly 19% year-on-year, while lets agreed increased by 5.8%. Average rents edged down 2% to £1,450 per month but remain close to record highs, with affordability still a significant constraint for tenants.

  • Winkworth Profits Dip in 2025 Despite Steady Revenue

    Winkworth Profits Dip in 2025 Despite Steady Revenue

    Winkworth’s Financial Performance in 2025

    As of 17th April 2026, Winkworth’s financial performance for the year ending 31st December 2025 shows a slight decrease in profit despite maintaining steady revenue. The company’s revenue remained relatively unchanged at £10.74m, compared to £10.79m the previous year. However, the profit before tax saw an 11% decline, amounting to £2.11m.

    Despite the dip in profit, Winkworth’s franchised network saw a 6% rise in revenues, reaching £68.7m. The sales income also experienced a boost, increasing by 10% to £35.8m, while lettings income saw a modest growth of 3%, totalling £32.9m. Sales accounted for 52% of total revenues, a slight increase from the previous year.

    Property Management Overtakes Lettings Income

    Interestingly, within the lettings figures, property management income saw a 9% growth to £17m, surpassing lettings income for the first time. This shift reflects both a reduction in the number of landlords in the sector and an increased demand from remaining landlords for fully managed services ahead of the Renters’ Rights Act. Property management accounted for 24.8% of network income, compared with 22.7% for lettings.

    Outlook for 2026 Amid Geopolitical Developments

    Looking ahead, Winkworth stated that early 2026 trading had been resilient, with sales registrations and agreed sales broadly in line with recent years. However, the company warned that the conflict in the Middle East had led to a sharp reversal in mortgage rates. Major lenders have raised fixed rates as swap rates rose on inflation concerns, reversing some of the affordability gains seen earlier in the year.

    Despite these challenges, Winkworth ended 2025 with a positive balance sheet, with £3.9m in cash and no debt. The company also increased its full-year dividends by 7% to 13.2p per share. Chief Executive Dominic Agace stated that while the outlook for 2026 is subject to geopolitical developments, the company continues to manage with the interests of its customers, franchisees, and shareholders at heart.

  • Landlords Expected to Sell 220,000 Rented Homes in 2026

    Landlords Expected to Sell 220,000 Rented Homes in 2026

    Landlords to Sell 5% of Private Rental Stock

    Pepper Money’s recent research reveals that approximately 220,000 rented homes are expected to be sold by the end of 2026, representing around 5% of the UK’s private rental stock. This significant reduction in rental properties is largely attributed to the upcoming Renters’ Rights Act, which will come into effect in May 2026. The Act is expected to influence landlords to withdraw over 65,000 households from the Private Rented Sector (PRS) in England by the end of the year.

    With only 5% of landlords having purchased a new rental property in the past year and subdued new starts in build-to-rent, it is unlikely that the exiting stock will be replenished at the same rate. This could result in a decrease in rental dwellings in 2026. The South East is expected to see the highest volume of dwellings exiting the PRS, with over 46,000 dwellings leaving the market. This represents over a fifth of all exits across the country, with 15% of all private landlords in the region planning to sell.

    Regional Rental Yields and Market Impact

    The North East, despite having a smaller number of rental properties, has the highest proportion of landlords intending to sell, with 21% planning to sell in 2026. However, this accounts for just 8% of total PRS exits nationally. The average rents in these regions highlight the potential market impact of these exits. In the South East, where rental demand is high, rents currently average around £1,893 per month. As such, the projected exit of over 46,000 homes could intensify competition and put further upward pressure on prices. Regional rental yields further explain landlord behaviour; in the South East yields are relatively modest at around 6%, which may make property investment less resilient to increased regulation.

    In the North East, average rents are lower, at around £946 per month, yet the high proportion of landlords planning to sell signals significant regional shifts in landlord sentiment even in more affordable markets. Other regions, including the East of England (£1,649 pcm), South West (£1,473 pcm), and London (£2,716 pcm), also show elevated rents, underscoring widespread market pressures across England.

    Changes to Renters’ Rights and Energy Efficiency Standards

    From 1 May 2026, renters in England will see some of the biggest changes to their rights in decades. From late 2026, a Private Rented Sector Database will also be introduced, requiring landlords to pay to join. Looking further ahead, all privately rented homes are expected to meet new energy efficiency standards by 2030, meaning better insulation, lower bills and greener living for renters.

  • First-Time Landlord: How to Get Your First BTL Mortgage

    First-Time Landlord: How to Get Your First BTL Mortgage

    TL;DR: Step-by-step guide for first-time landlords on getting a buy-to-let mortgage, from deposit requirements and rental yield calculations to lender criteria and stress tests.

    Key Takeaways

    • Specialist brokers can access deals not available on comparison sites or the high street
    • Every borrower’s situation is different — criteria vary significantly between lenders
    • Getting the right advice early saves time, money, and rejected applications

    What You Need to Know

    This is a topic that many borrowers find confusing, and for good reason — the criteria and options vary significantly depending on your circumstances, the property, and the lender. In this guide, we break down everything you need to know to make an informed decision.

    Whether you’re a first-time applicant or an experienced investor, understanding the landscape will help you secure the best possible deal. The UK mortgage market offers more specialist products than most people realise, but accessing them often requires expert guidance.

    How It Works

    The process typically starts with understanding your options and getting an agreement in principle. From there, a specialist broker can match you with lenders whose criteria fit your specific situation — something that’s particularly important in specialist lending where one-size-fits-all approaches rarely work.

    Lender criteria in this area can be surprisingly varied. What one lender rejects, another may actively welcome. This is why working with a broker who specialises in this area can make the difference between approval and rejection.

    Finding the Right Broker

    A specialist mortgage broker with experience in this area can save you time and money by matching you with the right lender first time. They’ll understand the nuances that generalist brokers might miss, and they’ll have relationships with lenders who specialise in exactly this type of lending.

    Find a specialist broker on Mortgage118 — compare whole-of-market brokers who specialise in this area, read verified reviews, and get matched with an expert who understands your needs.

    Frequently Asked Questions

    How do I find a specialist broker for this type of mortgage?

    Use a broker directory like Mortgage118 to search for brokers who specialise in this area. Look for whole-of-market brokers with specific experience and verified client reviews.

    How long does the application process take?

    Timelines vary depending on the complexity of your application and the lender. A straightforward case might complete in 4-6 weeks, while more complex situations could take 8-12 weeks. Your broker will give you a realistic timeline upfront.

    Do I need a larger deposit for specialist mortgages?

    It depends on the type of mortgage and your circumstances. Some specialist products require higher deposits than standard residential mortgages, but there are options across a range of LTVs. A broker can advise on what’s realistic for your situation.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Article reviewed by David Sampson, CeMAP qualified mortgage specialist.