Mortgage Fixed Rates Dip Slightly: What London Landlords Should Do Now

Small but Noteworthy Drop in Fixed Mortgage Rates

Mortgage Strategy's latest analysis shows a slight decrease in average fixed-rate buy-to-let mortgage prices this week, with both two-year and five-year fixed rates falling by 2 basis points (0.02%). Key lenders including Accord Mortgages, Coventry Building Society, Kensington Mortgages, and NatWest have reduced rates by varying margins — some by up to 0.15% — while introducing new products or withdrawing others.

Though the change is modest, it signals increased lender competition and possibly anticipates Bank of England base rate cuts in the near future. For landlords, especially those in London where property values and financing costs are high, even small rate shifts can impact mortgage payments and rental yields.

Why This Matters to London Landlords

London landlords typically face higher mortgage balances and tighter rental yields compared to other regions. A 0.02% drop in fixed rates may seem negligible, but when applied to large loan amounts, it can reduce monthly outgoings by tens or hundreds of pounds.

Moreover, expectations of future base rate cuts could lead to further mortgage price reductions, encouraging some landlords to refinance or adjust their portfolio strategies. Conversely, landlords with existing fixed-rate deals might see fewer incentives to switch if rates stabilise.

Practical Implications Across Landlord Profiles

• Single-unit landlords should review current mortgage deals to see if switching to a new product with a lower fixed rate or better terms could improve cash flow without incurring prohibitive fees.

• HMO (House in Multiple Occupation) landlords often balance higher mortgage costs with multiple rent streams; a slight rate drop might improve net returns, but operational factors like compliance and tenant management remain critical.

• Portfolio landlords can consider strategic refinancing to optimise overall financing costs, possibly locking in lower fixed rates on select properties while monitoring market movements for others.

• Accidental landlords should assess whether refinancing or switching mortgage products aligns with their long-term intentions, especially if rental income is marginally covering costs.

Steps to Take Immediately

1. Monitor lender websites and mortgage brokers regularly for updated products and rate changes — these can vary weekly.

2. Request current mortgage statements and calculate your effective interest rate and monthly payments, including fees.

3. Compare with new offers from your lender or competitors, considering early repayment charges or arrangement fees.

4. Consult a specialist mortgage adviser or financial planner familiar with buy-to-let lending to evaluate refinancing benefits.

5. Plan conversations with tenants if rental pricing might be adjusted due to changes in mortgage costs, ensuring transparent communication.

6. Review your portfolio’s financial planning, factoring in possible Bank of England base rate cuts and market competition effects on mortgage pricing.

7. Watch for increased market listings in spring, as more landlords may refinance or sell, potentially affecting tenant demand and rental pricing.

Benchmarking and Data Gaps

Mortgage Strategy provides headline rate changes but individual landlord circumstances vary widely. To benchmark effectively:

• Use your lender’s published buy-to-let mortgage rates as a starting point.
• Compare with specialist buy-to-let mortgage marketplaces such as Moneyfacts or Defaqto.
• Factor in your credit profile, loan-to-value ratio, and property type when assessing offers.

How Rentals & Sales Can Support You

Our landlord intelligence hub offers portfolio reviews, compliance audits, and pricing strategy consultations tailored to London’s dynamic market. We can help you:

• Analyse your current mortgage arrangements against market options.
• Understand financial impacts of changing mortgage rates on rental yields.
• Develop tenant communication plans aligned with your financing strategy.
• Prepare your portfolio for evolving market conditions including potential rate cuts.

Contact us to book a session with one of our experts.

Disclaimer: This article is for informational purposes and does not constitute financial advice. Landlords should consult qualified mortgage advisers before making refinancing decisions.