Landlords are regaining confidence in the buy to let mortgage market as rates stabilise and lenders adjust their affordability criteria. With new fixed deals returning to the mid-4% range and demand for rental property outstripping supply in many regions, investors are beginning to re-enter the market—albeit with more caution and sharper financial planning.
This comes as landlords balance rising costs with evolving mortgage products tailored for portfolio management and interest-only strategies.
Improved product choice after months of turbulence
Following a volatile 2023, the first half of 2025 has seen a gradual return of competitive mortgage products. According to financial comparison site Moneyfacts, average two-year fixed Buy to let mortgage rates have dropped from 6.17% in July 2023 to 4.89% this month. Meanwhile, five-year fixed options are now commonly offered below 5%, with some lenders extending terms to 40 years for affordability.
Brokers say lenders are increasingly flexible, particularly for experienced landlords with strong rental yields.
“Lenders know seasoned landlords are risk-savvy,” says David Hollingworth, associate director at L&C Mortgages. “We’re seeing underwriters taking a more pragmatic view, especially on properties with robust income-to-loan ratios.”
There has also been a notable uptick in products aimed at limited company landlords, reflecting the sector’s shift toward incorporation for tax efficiency. In May 2025, over 65% of all buy-to-let purchases were made through limited company buy to let, according to Hamptons.
Affordability tests remain tight—but workaround options grow
Affordability assessments, particularly on personal ownership mortgages, continue to challenge many smaller landlords. Most lenders require rental income to cover 125% to 145% of monthly interest payments at a notional rate of 5.5% or higher. That has pushed some investors into longer fixed terms or interest-only options to meet stress test thresholds.
However, many brokers are offering creative solutions.
“If landlords are refinancing a portfolio, we’ll often mix products—some fixed, some tracker—to reduce upfront stress test barriers,” explains Emma Smith, buy-to-let specialist at Core Mortgages. “It’s not one-size-fits-all anymore.”
Others are exploring top-slicing—where personal income supplements rental shortfalls—particularly among high-net-worth individuals expanding into semi-commercial or multi-unit blocks.
Landlords pivot to long-term strategy and yield-rich areas
The shift in the mortgage market has prompted landlords to focus on long-term returns and capital growth rather than short-term leverage. Northern regions such as the North East, Greater Manchester, and South Yorkshire continue to attract investor interest due to strong yields and lower entry costs.
“Landlords are thinking more strategically,” says Peter Beaumont, CEO of The Mortgage Lender. “It’s no longer about maximum borrowing—it’s about sustainability.”
While higher costs have thinned out speculative buyers, experienced landlords are leveraging equity, diversifying portfolios, and seeking value beyond London and the South East.
With interest rates stabilising and lenders adapting to changing regulation, the buy-to-let mortgage market is entering a more mature phase—rewarding those who plan carefully, think long-term, and understand how to work within the system.