Mortgage Rate Cuts by TSB, Cov BS, Hodge and YBS: What London Landlords Need to Know

What Has Changed?

In April 2024, key lenders including TSB, Coventry Building Society (Cov BS), Hodge Bank, and Yorkshire Building Society (YBS) announced reductions in mortgage interest rates across residential, buy-to-let (BTL), and holiday let mortgage products. These moves reflect ongoing market adjustments influenced by factors such as base rate changes and lending competition.

For example, TSB lowered rates on several BTL fixed-rate deals by approximately 0.2–0.3 percentage points. Cov BS and YBS reduced their standard and discounted rates on select residential and BTL mortgages. Hodge Bank cut rates on holiday let mortgages, a niche but growing lending sector.

Why This Matters to Landlords

Though these changes don't create new compliance or letting agent requirements, they significantly affect landlord finances and investment strategies. Mortgage interest is a major expense for buy-to-let landlords, impacting cash flow, profitability, and yield.

Lower rates can reduce monthly repayments, easing financial pressures or enabling more competitive rent pricing. Landlords locked into higher rates should proactively review mortgage arrangements to identify potential savings.

Holiday let landlords may benefit from improved financing options supporting portfolio diversification or refurbishments, as holiday let mortgage rates tend to be more variable and often higher than standard BTL.

Implications for Different Landlord Profiles

• Single-Unit Landlords: Remortgaging at lower rates can reduce expenses with minimal administrative effort.
• Portfolio Owners: Detailed mortgage portfolio reviews help identify savings by considering deal maturities and possible consolidation.
• HMO Landlords: With tailored financing needs, HMO landlords should review eligibility and product terms in light of rate cuts.
• Accidental Landlords: Those less familiar with mortgages should seek advice to explore refinancing opportunities and assess impacts on cash flow and tax.

Practical Next Steps for Landlords and Property Teams

1. Review Current Mortgage Deals: Document all mortgages, noting rates, expiry dates, and early exit penalties.
2. Contact Lenders or Brokers: Explore updated offerings from TSB, Cov BS, Hodge, YBS, and others. Savings often justify remortgaging costs, even with penalties.
3. Assess Cash Flow Impact: Model new rates’ effects on repayments and portfolio income; factor in seasonal variations for holiday lets.
4. Schedule a Portfolio Financing Review: Engage financial advisors or mortgage brokers for tailored refinancing strategies.
5. Communicate with Tenants if Appropriate: If refinancing enables rent changes or improvements, plan clear communication to maintain good relations.
6. Monitor Market Updates: Assign responsibility to track lender announcements monthly.

Risk Mitigation and Strategic Planning

Property teams should mitigate refinancing risks, especially when deals near expiry or penalties are high. Begin discussions 3-6 months before deal end dates to avoid forced transitions on unfavourable terms.

Integrate refinancing strategies into broader financial and property planning. Reduced mortgage costs may enable acquisitions, refurbishments, or diversification.

How Rentals & Sales Can Support You

Our landlord intelligence hub offers portfolio reviews and compliance audits to spot cost-saving opportunities and boost efficiency. We provide expert advice on mortgage products and pricing to help maximise returns and reduce risk.

Contact our expert team to schedule a consultation tailored to London’s rental market and finance environment.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Landlords should seek personalised advice from qualified mortgage brokers or financial advisors before making refinancing decisions.