It’s been a tough stretch for many mortgage holders, especially landlords moving from low 1-2% deals to long-term rates of 4-5% or more. For Buy to Let investors, this shift has reshaped portfolio planning and profitability.
But there’s a silver lining: mortgage rates are now settling into what may become the new normal, and the Buy to Let market is showing strong signs of recovery.
Market rebound: Key Q1 2025 highlights
According to UK Finance, which represents over 300 financial institutions, Q1 data reveals:
-
58,347 new Buy to Let loans were advanced up 38.6% year on year
-
Gross rental yields rose to 6.94% (from 6.88%)
-
Average interest rate on new Buy to Let loans: 4.99%
-
Interest cover ratio (ICR) climbed to 202% (from 190%)
Despite speculation that landlords are exiting the market due to rising rates, lower returns, and the upcoming Renters Rights Bill, the data tells a more optimistic story.
Navigating legislative change
With the Renters Rights Bill on the horizon, many landlords are preparing for the end of Section 21 and adjusting tenancy terms.
It’s a moment of transition, but also a prime opportunity to reassess your financial setup, especially if you're new to Buy to Let or expanding your portfolio.
Rachel Springall of Moneyfacts notes:
“The average five year fixed Buy to Let rate is now at its lowest level in over six months, but year on year the rate has not dropped as viciously as its two year counterpart.”
Moneyfacts data from June 2025 shows:
-
Buy to Let mortgage products increased from 2,935 to 4,144
-
Two-year fixed rates average 4.98% - lowest since Sept 2022
-
Five-year fixed rates average 5.29% - lowest since Oct 2024
You can explore the latest rates with our trusted partner, Embrace Financial Services.
Planning ahead: EPC requirements
Looking further ahead, landlords should prepare for the proposed EPC C rating requirement for all Private Rented Sector properties by 2030.
This replaces the current E standard and may involve upgrade costs, so early planning is key. While exemptions may apply, it’s wise to assess your property’s energy performance now.
If your mortgage or Buy to Let finance hasn’t been reviewed in the past year, now’s the time. Our partners at Embrace Financial Services are here to help - highly rated on Trustpilot and available evenings and weekends to fit your schedule.
Your home may be repossessed if you do not keep up repayments on your mortgage
Most Buy-to-Let Mortgage are not regulated by the Financial Conduct Authority
The Reeds Rains Content Marketing Team
