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Pressure on landlords takes shine off BTL rate cuts

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
10/09/2025

Pressure on landlords takes shine off BTL rate cuts

Buy-to-let fixed rates dipped to their lowest points since September 2022, and choice rose to a record high, according to Moneyfactscompare.co.uk. However, landlords are facing financial challenges, and rumours of more tax reforms in the Budget could hit investors hard.

Pressure on landlords takes shine off BTL rate cuts

Buy-to-let fixed rates dipped to their lowest points since September 2022, and choice rose to a record high, according to Moneyfactscompare.co.uk. However, landlords are facing financial challenges, and rumours of more tax reforms in the Budget could hit investors hard.

  • Average buy-to-let fixed rates over two- or five-year have dipped to their lowest levels since September 2022. The average two- and five-year fixed rates stand at 4.88% and 5.21% respectively.
  • Overall buy-to-let product availability (fixed and variable) rose to 4,597 deals, its highest count on our electronic records (November 2011). There are still more five-year fixed deals than two-year fixed deals. Deeper analysis of the loan-to-value tiers shows record volumes of deals at 80% and 75% LTVs, both for two- and five-year fixed options.

 

  • Average buy-to-let fixed rates over two- or five-year have dipped to their lowest levels since September 2022. The average two- and five-year fixed rates stand at 4.88% and 5.21% respectively.
  • Overall buy-to-let product availability (fixed and variable) rose to 4,597 deals, its highest count on our electronic records (November 2011). There are still more five-year fixed deals than two-year fixed deals. Deeper analysis of the loan-to-value tiers shows record volumes of deals at 80% and 75% LTVs, both for two- and five-year fixed options.

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Landlords looking to refinance or entering the market may be encouraged to see that buy-to-let rates have dipped to their lowest levels since September 2022, both for either a two- or five-year fixed term. Those landlords who locked into a fixed rate deal in 2023 and are due to refinance will find the average two-year fixed rate has fallen from 6.64% to 4.88%, and the rate has edged slightly lower than 5% since the start of June 2025 (4.98%). However, uncertainties on the path of interest rates, and the changes to mortgage interest tax relief embedded by April 2020, meant some landlords would have grabbed a five-year fixed deal for peace of mind. In September 2020, the average five-year fixed rate was 3.20%, but today the difference in rate is around 2% more, at 5.21%. The availability of buy-to-let products has climbed to a record-high, which includes options at the higher end of the loan-to-value spectrum where landlords only need to muster up a 20% deposit or equity.

“The cost of finance is a fundamental part of becoming a landlord, as tax changes over the years have led to a more challenging situation for investors to hit desirable profit margins. The speculation on more changes to hit private landlords in the upcoming Budget will also lead to more concerns. Those who do not have buy-to-lets held in a limited company could get hit if National Insurance Contributions (NICs) are levied on pre-mortgage profits. Hamptons had previously estimated that a limited company would be the structure of choice for the next generation of investors. The growing number of set-ups will only escalate if the Government makes the NICs levy rumour a reality.

“The mounting pressure on landlords is stark, as recent figures from UK Finance revealed buy-to-let mortgage repossessions are up by 11% year-on-year. Not only this, but there are growing reasons for landlords to seriously consider leaving the market, or to reduce their portfolio. A record 26% of landlords sold at least one property in 2024 while just 8% of landlords bought, according to a survey from the National Residential Landlords Association (NRLA).

“The path for landlords remains uncertain, as many will be struggling to keep up with legislation, which can come at a financial cost and time drain to keep up with changes. However, it doesn’t stop there, as many are waiting with bated breath on the decisions surrounding the Renters’ Rights Bill. One of the major areas here is the abolition of Section 21 ‘no-fault’ evictions, which will offer greater security to renters, because landlords will no longer be able to evict tenants without providing a reason.

“Another area being reviewed in the Renters’ Rights Bill, which will favour tenants, is the Decent Homes Standard, in which landlords will have to make sure that their rented property meets specific heat, safety and functionality requirements. However, since April 2020, landlords have been prohibited from letting properties with an EPC rating below E, so there would have already been progress to make the private rental sector (PRS) more energy-efficient, no doubt saving renters some cash on their energy bills as a result. New or existing landlords would be wise to seek advice to assess how any moves in the sector will impact them. If they want to exit the sector, they will need to understand the costs involved, which include any agent fees and Capital Gains Tax (CGT).”

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Landlords looking to refinance or entering the market may be encouraged to see that buy-to-let rates have dipped to their lowest levels since September 2022, both for either a two- or five-year fixed term. Those landlords who locked into a fixed rate deal in 2023 and are due to refinance will find the average two-year fixed rate has fallen from 6.64% to 4.88%, and the rate has edged slightly lower than 5% since the start of June 2025 (4.98%). However, uncertainties on the path of interest rates, and the changes to mortgage interest tax relief embedded by April 2020, meant some landlords would have grabbed a five-year fixed deal for peace of mind. In September 2020, the average five-year fixed rate was 3.20%, but today the difference in rate is around 2% more, at 5.21%. The availability of buy-to-let products has climbed to a record-high, which includes options at the higher end of the loan-to-value spectrum where landlords only need to muster up a 20% deposit or equity.

“The cost of finance is a fundamental part of becoming a landlord, as tax changes over the years have led to a more challenging situation for investors to hit desirable profit margins. The speculation on more changes to hit private landlords in the upcoming Budget will also lead to more concerns. Those who do not have buy-to-lets held in a limited company could get hit if National Insurance Contributions (NICs) are levied on pre-mortgage profits. Hamptons had previously estimated that a limited company would be the structure of choice for the next generation of investors. The growing number of set-ups will only escalate if the Government makes the NICs levy rumour a reality.

“The mounting pressure on landlords is stark, as recent figures from UK Finance revealed buy-to-let mortgage repossessions are up by 11% year-on-year. Not only this, but there are growing reasons for landlords to seriously consider leaving the market, or to reduce their portfolio. A record 26% of landlords sold at least one property in 2024 while just 8% of landlords bought, according to a survey from the National Residential Landlords Association (NRLA).

“The path for landlords remains uncertain, as many will be struggling to keep up with legislation, which can come at a financial cost and time drain to keep up with changes. However, it doesn’t stop there, as many are waiting with bated breath on the decisions surrounding the Renters’ Rights Bill. One of the major areas here is the abolition of Section 21 ‘no-fault’ evictions, which will offer greater security to renters, because landlords will no longer be able to evict tenants without providing a reason.

“Another area being reviewed in the Renters’ Rights Bill, which will favour tenants, is the Decent Homes Standard, in which landlords will have to make sure that their rented property meets specific heat, safety and functionality requirements. However, since April 2020, landlords have been prohibited from letting properties with an EPC rating below E, so there would have already been progress to make the private rental sector (PRS) more energy-efficient, no doubt saving renters some cash on their energy bills as a result. New or existing landlords would be wise to seek advice to assess how any moves in the sector will impact them. If they want to exit the sector, they will need to understand the costs involved, which include any agent fees and Capital Gains Tax (CGT).”

 

Buy-to-let market analysis

Product numbers

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

BTL product count (fixed and variable)

2,075

2,475

3,186

4,487

4,597

Two-year fixed rate BTL all LTVs

535

700

1,100

1,518

1,547

Two-year fixed rate BTL at 60% LTV

84

72

77

99

103

Two-year fixed rate BTL at 75% LTV

253

347

514

808

818

Two-year fixed rate BTL at 80% LTV

85

74

130

193

207

Five-year fixed rate BTL all LTVs

842

1,110

1,399

1,838

1,860

Five-year fixed rate BTL at 60% LTV

107

83

93

108

112

Five-year fixed rate BTL at 75% LTV

409

592

698

955

974

Five-year fixed rate BTL at 80% LTV

126

80

145

231

246

Average rates

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Two-year fixed rate BTL all LTVs

4.47%

6.64%

5.35%

4.91%

4.88%

Two-year fixed rate BTL at 60% LTV

3.69%

6.48%

4.86%

4.35%

4.31%

Two-year fixed rate BTL at 75% LTV

4.46%

6.64%

5.37%

4.88%

4.87%

Two-year fixed rate BTL at 80% LTV

5.00%

7.30%

6.08%

5.58%

5.54%

Five-year fixed rate BTL all LTVs

4.72%

6.49%

5.33%

5.23%

5.21%

Five-year fixed rate BTL at 60% LTV

3.87%

5.95%

4.65%

4.43%

4.43%

Five-year fixed rate BTL at 75% LTV

4.76%

6.57%

5.38%

5.27%

5.24%

Five-year fixed rate BTL at 80% LTV

5.28%

7.09%

6.01%

5.70%

5.67%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

 

Buy-to-let market analysis

Product numbers

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

BTL product count (fixed and variable)

2,075

2,475

3,186

4,487

4,597

Two-year fixed rate BTL all LTVs

535

700

1,100

1,518

1,547

Two-year fixed rate BTL at 60% LTV

84

72

77

99

103

Two-year fixed rate BTL at 75% LTV

253

347

514

808

818

Two-year fixed rate BTL at 80% LTV

85

74

130

193

207

Five-year fixed rate BTL all LTVs

842

1,110

1,399

1,838

1,860

Five-year fixed rate BTL at 60% LTV

107

83

93

108

112

Five-year fixed rate BTL at 75% LTV

409

592

698

955

974

Five-year fixed rate BTL at 80% LTV

126

80

145

231

246

Average rates

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Two-year fixed rate BTL all LTVs

4.47%

6.64%

5.35%

4.91%

4.88%

Two-year fixed rate BTL at 60% LTV

3.69%

6.48%

4.86%

4.35%

4.31%

Two-year fixed rate BTL at 75% LTV

4.46%

6.64%

5.37%

4.88%

4.87%

Two-year fixed rate BTL at 80% LTV

5.00%

7.30%

6.08%

5.58%

5.54%

Five-year fixed rate BTL all LTVs

4.72%

6.49%

5.33%

5.23%

5.21%

Five-year fixed rate BTL at 60% LTV

3.87%

5.95%

4.65%

4.43%

4.43%

Five-year fixed rate BTL at 75% LTV

4.76%

6.57%

5.38%

5.27%

5.24%

Five-year fixed rate BTL at 80% LTV

5.28%

7.09%

6.01%

5.70%

5.67%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Adam French Head of News & Communications
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Press & PR Executive