Unrest in the Middle East is adding hundreds of pounds to landlords’ new buy-to-let mortgages, according to Moneyfactscompare.co.uk.

The average two-year fixed buy-to-let mortgage had increased from 4.6% at the start of March to 5.2% on 26^th March, meaning that borrowing costs for those who take a two-year fixed deal are now £1,100 higher, compared to the beginning of the month.

Five-year fixed rates also increased from 5% to 5.6% over the same period, the highest level since January 2024.

Overall buy-to-let product choice (fixed and variable) has fallen sharply, by about 1,300 deals since the start of March to 4,332.

Meanwhile, landlords are preparing for the Renters’ Right Act, which comes into force this May, and are expected to invest in energy efficient measures in order to reach an EPC C rating by October 2030.

Unrest

Rachel Springall, finance expert at Moneyfactscompare, says the unrest in the Middle East has caused absolute mayhem in the residential mortgage market, as buy-to-let rates are also being hiked, and hundreds of deals have been pulled from sale.

“Rising costs could lead to higher rental payments for tenants, or a drop in the pool of properties available for rent if landlords decide enough is enough and sell off their portfolio,” says Springall.

Higher

“Those who were to take out a mortgage now compared to the start of this month will face higher repayments of £1,100 more a year. This is based on a borrowing of £250,000, over 25 years at 5.2%, versus 4.6% at the start of March.”

Megan Eighteen, president of ARLA Propertymark, believes rising buy-to-let mortgage rates will place significant additional pressure on many landlords at a time when they are already grappling with substantial regulatory and cost burdens. “Increased borrowing costs, combined with reduced product choice, risk undermining confidence in the sector and could ultimately restrict the supply of homes in the private rented market,” adds Eighteen.

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