Buy-to-let mortgage market tightens amid geopolitical unrest

UK landlords seeking to refinance or secure new buy-to-let borrowing are encountering a shrinking selection of mortgage products and rising interest rates. This trend follows market volatility linked to the conflict involving Iran, which has unsettled financial markets and influenced lender behaviour.

Data from Moneyfactscompare.co.uk, compiled for Property118.com, reveals that the number of buy-to-let mortgage deals available fell from 5,660 on 1 March 2026 to 5,081 by 12 March 2026. This represents a reduction of 579 deals across both fixed and variable rate mortgages in less than two weeks.

Several lenders have withdrawn existing deals only to reintroduce replacement products with higher pricing, while others have yet to return to the market. Given the rapid shifts in swap markets, further deal withdrawals or repricing remain possible as lenders reassess borrowing costs.

Impact on mortgage rates for landlords

Rachel Springall, finance expert at Moneyfactscompare.co.uk, told Property118.com: “Several buy to let lenders have either withdrawn deals from their range or replaced them since the start of March, with inflated rates. As a result, product choice is down by almost 600 options and may well be hit further.”

She added: “This is a blow to landlords who are hoping for rates to come down and who have already been enduring tax hikes, as well as regulation changes and rising costs.”

Springall explained that the volatility in swap rates is being driven by unrest in the Middle East, which has affected gilt yields. Consequently, lenders are adopting a more cautious approach to rate-setting for buy-to-let deals, mirroring similar rate increases in the residential mortgage market.

Recent movements in buy-to-let mortgage rates

Landlords looking for new buy-to-let or remortgage deals will find that rates have edged upwards. The average two-year buy-to-let mortgage rate rose from 4.66% on 1 March to 4.77% by 12 March, an increase of 0.11%. Five-year rates increased more sharply, moving from 5.05% to 5.19% over the same period, a rise of 0.14%.

These rate changes coincide with broader mortgage market disruption following the Iran conflict, which pushed oil prices higher. Previously, financial markets had anticipated a potential Bank of England base rate reduction in the near term, possibly as soon as next week, based on positive inflation data. However, rising energy costs have shifted expectations towards sustained inflationary pressure.

What this means for UK landlords

Rachel Springall commented: “The path for interest rates can change quickly, only a few weeks ago economists were expecting interest rates to fall, but that outlook has changed. There is some hindsight that such unrest will be short-term, but it is too early to tell how long it will last.”

She noted that it now appears unlikely the Bank of England will cut the base rate next week, with a hold being more probable. Rising oil prices threaten to push inflation higher again, reducing the case for a rate cut.

Springall warned: “In the worst circumstances, we may get an increase to BBR before the year is over. Once stability returns, borrowers will get a better sense of where rates might rest in the coming weeks, but prolonged uncertainty will continue to hit borrowing costs, so acting fast to secure a deal is wise.”

For landlords, this means that securing favourable mortgage terms may become more challenging in the short term. With fewer deals available and rates rising, those considering refinancing or new borrowing should act promptly to avoid further cost increases.

Summary

The Iran conflict has directly influenced UK buy-to-let mortgage markets by reducing product availability and increasing rates. Landlords face a more cautious lending environment amid economic uncertainty and rising inflationary pressures, underscoring the importance of timely financial decisions.

Suggested internal link anchors

• buy to let borrowing
• buy to let mortgage rates
• mortgage product choice
• Bank of England base rate
• inflation and mortgage rates
• buy to let remortgage deals
• impact of geopolitical events on property finance
• landlord refinancing options
• mortgage market volatility
• oil prices and inflation

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/