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 26th 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.”
While landlords are right to be cautious, there’s no need for alarm, says Jeni Browne, business development director at MFB (pictured). The recent volatility has effectively pushed expectations for meaningful pricing reductions back by around a year, she tells LandlordZONE. “If the situation in the Middle East escalates and conditions stabilise, we could still see a Bank of England Base Rate cut later this year. In that scenario, swap rates should ease and buy to let mortgage pricing would follow, but would still remain higher than we’ve seen at the start of 2026.”
Tensions
Browne believes that if tensions remain as they are, rates will remain unchanged, and fixed‑rate products are likely to hold steady at the current levels.
“The real risk comes from an escalation: up to three Base Rate rises this year could drive fixed‑rate mortgages 1.5% higher, putting further pressure on landlords’ margins,” she adds.
“Landlords do have options, and it’s worth being proactive. If you have a remortgage in the next six months, it’s a good idea to review your options and secure a rate early. Speaking to a specialist broker can help you find competitive rates, restructure your portfolio, or explore limited-company borrowing.”