The latest data from Moneyfacts shows that the average two-year rate is at its highest level for a year at 5.29% as of 26 March and the five-year rate is at its highest level for two years at 5.63% as of 26 March.

It found that borrowing costs for those who take a two-year fixed deal are now £1,100 higher, compared to the start of March 2026, based on a £250,000 loan, with a 25-year term.

Overall BTL product choice (fixed and variable) has fallen sharply, by around 1,300 deals since the start of March, with choice last below 5,000 in November 2025.

Landlords will also be preparing for the Renters’ Right Act, which comes into force this May.

In addition, they will be expected to invest up to £10,000 to reach an EPC rating of C by October 2030.

Moneyfacts finance expert Rachel Springall says: “Soaring borrowing costs will cause pain to landlords this year, as they join millions of consumers facing higher mortgage repayments.”

“This is terrible news, as 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. The unrest in the Middle East has caused absolute mayhem in the residential mortgage market, buy-to-let rates are also being hiked, and hundreds of deals have been pulled from sale.”

“The positive sentiment entering 2026 has been shattered, and landlords not only have to face higher borrowing costs, but also prepare themselves for the Renters’ Rights Bill, which comes into effect at the start of May 2026.”

Springall adds: “It is entirely possible that landlords may have to take on an additional loan this year to cover refurbishment costs, to ensure they abide by the Decent Homes Standard, which is set out in the Renters’ Rights Bill, again coming into force this May.”

“It is of course essential that tenants feel safe and secure in their homes, and it will be ever more essential to have a dwelling as energy-efficient as possible with rising costs expected this summer.”

“Thankfully, lots of progress would have been made to make private lets more energy-efficient over the past six years, under the Minimum Energy Efficiency Standard (MEES) regulations, whereby landlords have been prohibited from letting properties with an EPC rating below E.”

“However, landlords’ costs will escalate further, as they are expected to invest up to £10,000 as a spending cap to reach an EPC rating of C by October 2030, subject to the value of a property. If that EPC rating is not achieved, landlords could face substantial fines, as the rules apply to all tenancies.”

Association of Residential Letting Agents president Megan Eighteen says: “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.

“With landlords also preparing for the introduction of the Renters’ Rights Act and facing potentially high costs to meet future EPC requirements, there is a real concern that some may reassess their position and exit the market altogether. This would exacerbate existing supply shortages and place further upward pressure on rents for tenants.

“It is essential that the cumulative impact of these changes is recognised. A balanced approach is needed to ensure improvements to housing standards can be delivered without discouraging investment or reducing the availability of much-needed rental homes.”