Landlords are facing soaring buy-to-let mortgage rates – which could also feed into the costs paid by renters – according to a financial information website.
Average buy-to-let fixed mortgage rates over a two or five-year term have risen since the start of March, Moneyfactscompare.co.uk said.
The average two-year buy-to-let fixed mortgage rate on the market on March 26 was 5.29% – the highest since February 2025, according to the website’s figures.
The average five-year fixed buy-to-let rate on the market on March 26 was 5.63% – the highest since January 2024.
The overall buy-to-let product choice, including fixed and variable rate mortgages, has fallen sharply, by around 1,300 deals since the start of March, the website said.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said rising mortgage rates for landlords could filter into tenants’ costs in the form of higher rents.
There could also be a fall in the pool of rental homes if more landlords decide to sell up, she said.
Ms Springall said: “The unrest in the Middle East has caused absolute mayhem in the residential mortgage market, buy-to-let rates are also being hiked and hundreds of deals have been pulled from sale.
“The positive sentiment entering 2026 has been shattered.”
Ms Springall said that landlords also have new rules to abide by, adding: “Seeking advice will be essential for new or existing landlords to keep on top of the changing legislation and how rising costs and interest rate rises will hit their profit margins.”
David Fell, lead analyst at property firm Hamptons, said: “The last time mortgage rates spiked in late 2022, landlords’ higher costs were quickly passed on to tenants through rapidly rising rents.
“Tenants looking for somewhere new to live were forced into above-asking-price bidding wars to secure a home while renters renewing existing contracts, who may have been paying the same rents for years, also saw their rents rise.
“But as mortgage rates dropped back in 2025, rental growth slowed.”
Mr Fell added: “If interest rates remain materially elevated, there is a risk that we will see a second round of elevated rental growth.”
