Recent analysis from the TDS Charitable Foundation challenges the common perception that rising buy-to-let (BTL) mortgage rates are the primary cause of increasing rents. Despite mortgage rates climbing notably over the past year, landlords cite other factors as more influential in rent adjustments.

Mortgage Rate Increases and Their Impact

Data from Moneyfacts reveals that average BTL mortgage rates have risen significantly, with two-year fixed deals increasing from 4.66% to 5.40%, and five-year fixes moving from 5.05% to 5.72%. Such increases have sparked warnings that higher borrowing costs for landlords would inevitably lead to higher rents for tenants.

However, the TDS Charitable Foundation’s Voice of the Landlord Survey, which canvassed over 2,000 landlords in England, presents a more nuanced picture. It found that only 26% of landlords who raised rents in the past year attributed the increase primarily to growing mortgage costs.

Other Factors Driving Rent Increases

More frequently cited reasons for rent rises included increased property maintenance and running costs (49%), aligning rents with the local market (44%), and broader increases in the cost of living (41%). This suggests that day-to-day operational costs and market conditions are more significant drivers of rent adjustments than mortgage expenses alone.

Additionally, the survey highlighted that 49% of landlords now own their properties outright, a substantial increase from 31% the previous year. This means nearly half of landlords are insulated from mortgage rate fluctuations entirely, reducing the overall sector’s sensitivity to interest rate changes.

Interest-Only Loans and Borrowing Patterns

Among landlords who do have mortgages, 28% hold interest-only BTL loans. These landlords face direct exposure to rate increases, as higher interest payments affect monthly costs without reducing the loan principal. Despite this, the Foundation emphasises that rent-setting behaviour appears to be influenced more by everyday economic factors than by financing costs alone.

For landlords who chose not to increase rents, the predominant reason (52%) was concern over tenants’ financial situations, alongside a desire to retain existing tenants. This cautious approach contradicts the narrative of landlords rapidly passing on borrowing cost increases to tenants.

Landlord Borrowing and Market Exposure

Supporting these findings, Property118’s recent Landlord Sentiment Survey Q1 2026, based on 2,380 responses, shows that most landlords operate with relatively modest borrowing levels. The majority have loan-to-value ratios at or below 50%, and a significant portion own their properties outright.

This data challenges the long-held assumption that the BTL sector is heavily leveraged and highly vulnerable to interest rate shocks. While landlords with higher borrowing remain sensitive to refinancing pressures and rate changes, they constitute a smaller segment of the market than often believed.

What this means for landlords

For landlords and agents, these insights underline the importance of considering a broad range of factors when reviewing rent levels. While mortgage costs are a factor, operational expenses, local market conditions, and tenant affordability play critical roles in rent-setting decisions.

Landlords with outright ownership or low loan-to-value ratios may find themselves less exposed to interest rate volatility, allowing for more stable rental strategies. Meanwhile, those with interest-only loans should carefully monitor borrowing costs but also recognise that tenant retention and market alignment remain key considerations.

The TDS Charitable Foundation notes that its 2026 survey will offer further clarity on whether sustained high borrowing costs will shift this balance in the coming year.

Source: Based on reporting from Property118

TLA Training Academy

The Landlord Association has launched its new Training Academy for UK landlords, providing structured guidance, compliance education, and practical knowledge to support landlords at every stage. Members can now complete the programme and become TLA Certified Landlords at no additional cost as part of their membership.

Landlords can explore the Academy here: https://landlordassociation.org.uk/tla-academy/

Those looking to join and access the full training and certification can register here: https://landlordassociation.org.uk/landlord-association-membership-uk/

TLA update

The Landlord Association is currently onboarding new service providers into its Trusted Partner Hub, a new initiative designed to support landlords, tenants, letting agents, and property managers with vetted, high-quality services. As one of the fastest growing landlord associations in the UK, TLA offers partners direct access to an engaged and active member base at the point of need. Service providers across legal, maintenance, insurance, finance, mortgages, tenant screening, and property services can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/