Santander and Principality BS Adjust Mortgage Rates: What London Landlords Need to Know

What Has Changed?

From mid-April 2026, two key lenders have updated their mortgage offerings in ways that could materially affect London’s private landlords:

• Santander has announced reductions in mortgage rates across various products, including buy-to-let purchases and product transfers.
• Principality Building Society has implemented mixed adjustments: rate reductions on some shared ownership and holiday let mortgages but rate increases on certain residential, new build, and joint borrower sole proprietor products. They have also cut fees on some high loan-to-value (LTV) fixed residential mortgages.

Why These Changes Matter to Landlords

Impact on Borrowing Costs and Affordability

For landlords with mortgages due for renewal, remortgaging, or new borrowing, Santander’s buy-to-let rate cuts could offer lower monthly interest payments, improving cash flow and potentially increasing net rental income.

Conversely, Principality’s mixed changes mean some landlords — especially those with standard residential or new build buy-to-let mortgages — might face higher borrowing costs, negatively impacting affordability calculations.

Compliance and Financial Planning Implications

Letting agents and landlord finance teams should review affordability assessments immediately. Changes in rates affect not only monthly repayments but also stress-testing scenarios mandated by lenders and regulators. Updating these calculations ensures compliance and realistic budgeting.

Different Landlord Profiles

• Single-Unit Landlords: Likely to benefit from Santander’s rate cuts if refinancing; must check if their specific mortgage product is included.
• HMO and Portfolio Landlords: Principal’s rate increases on some products pose risks if financing multiple properties with Principality; a strategic review of mortgage spread across lenders is advised.
• Accidental Landlords: Often less engaged with mortgage product details; letting agents should proactively inform these landlords to avoid unexpected cost pressures.

Practical Next Steps

1. Conduct Immediate Product Reviews: Landlords and property managers should obtain the full updated rate sheets from Santander and Principality. Pay attention to product-specific terms, particularly around buy-to-let and holiday lets.

2. Update Affordability and Stress Tests: Work with mortgage brokers or financial advisors to refresh affordability calculations and ensure compliance with lender requirements.

3. Communicate with Tenants and Landlords: Transparent communication about potential changes in mortgage costs helps manage expectations on rent levels and potential property acquisition plans.

4. Assess Portfolio Exposure: Especially for landlords with multiple properties or mixed-use portfolios, assess the impact of rate changes on overall financing costs and consider refinancing or lender diversification.

5. Schedule Strategic Reviews: Property teams should plan sessions in April to fully absorb the changes, update financial models, and adjust acquisition or disposal strategies accordingly.

What Renting & Sales Can Do for You

Our team offers comprehensive portfolio reviews and compliance audits to help you understand how these mortgage rate changes affect your operations. We also assist with pricing strategy adjustments to balance tenant affordability with rental yield optimisation. Reach out for a tailored consultation to safeguard your investments and streamline financial planning.

Disclaimer: This article provides a summary of mortgage rate changes from Santander and Principality Building Society as of April 2026. Landlords should verify current mortgage products and rates directly with lenders or qualified brokers, as mortgage offerings remain subject to change.