The UK rental market remains highly active, with landlords experiencing strong demand from tenants due to a large renter population. While major cities are the primary hubs, commuter towns are also seeing increased tenant interest.

Although mortgage costs for landlords have risen over the past few years due to higher rates and inflation, rental incomes and yields have also increased due to supply and demand imbalances. Recently, buy-to-let mortgage rates have started to improve as lenders compete to offer more attractive products to both existing and new borrowers, enhancing the outlook for investors and landlords seeking new products.

Buy-to-let mortgage rates drop this week

One notable lender reducing its buy-to-let mortgage rates this week is The Mortgage Works, a specialist lender known for its competitive offerings. Starting today, it is introducing buy-to-let mortgage products for new customers with rates starting at 3.49%, with reductions of up to 0.35% on some products.

For instance, the new two-year fixed rate for purchase and remortgage is now 3.99% with a £3,995 fee for loan-to-value (LTV) up to 65%, down by 0.35%. For those seeking a five-year rate, it has been reduced by 0.10% to 3.69% with a 3% fee, up to 65% LTV.

Joe Avarne, senior manager of buy-to-let mortgages at The Mortgage Works, stated: “With rates starting from 3.49%, these latest reductions from The Mortgage Works will help widen market access for buy-to-let investors.”

NatWest, another major lender, has also cut its buy-to-let mortgage rates by up to 6 basis points (bps). It now offers a two-year fixed rate of 4.16% with a £3,499 fee for LTVs up to 75%. At 60% LTV, borrowers can secure rates from 3.69% with a £3,499 fee. NatWest’s five-year buy-to-let mortgage purchase deal is now 4.28% at 60% LTV or 4.32% at 75% LTV with a £995 fee, a reduction of up to 32bps.

LendInvest Mortgages has also lowered its buy-to-let mortgage rates this week, launching its lowest rates of the year, starting at 3.44%. These products cater to a range of customers, from first-time landlords to experienced portfolio managers.

Sophie Mitchell-Charman, commercial director at LendInvest, commented: “We understand how important competitive rates are for landlords, whether they’re looking to expand their portfolios or maximise returns on existing properties. In today’s market, flexibility and affordability are key, and this rate cut is a direct response to those needs. By offering some of the lowest buy-to-let rates on the market, we’re making it easier for landlords to access financing that fits their specific investment strategies. This move is a testament to our ongoing commitment to providing market-leading products, underpinned by innovation and customer-centricity, to ensure we remain a top choice for property investors across the UK.”