Rising buy-to-let mortgage rates will put increased pressure on landlords and renters

Landlords are currently facing increased pressure as buy-to-let mortgage rates rise, raising concerns that tenants may soon experience higher rents.

According to the financial comparison website Moneyfactscompare.co.uk, the average fixed rate for a two-year buy-to-let mortgage reached 5.29% on March 26, the highest level since February 2025. The five-year fixed rate rose to 5.63%, marking its highest point since January 2024.

Additionally, the number of available mortgage deals for landlords has sharply decreased, with around 1,300 fewer products available since the beginning of March. This reduction affects both fixed and variable-rate options.

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, warned that the rising borrowing costs for landlords are likely to be passed on to tenants. She stated, “Rising mortgage rates for landlords will inevitably put upward pressure on rents, adding to the cost-of-living challenges for renters across the UK.”

This trend underscores the ongoing strain in the property market, as landlords must balance increasing borrowing costs with rental income, while prospective tenants face higher monthly payments amid already elevated living expenses.

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.”