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Buy to Let Mortgages in 2025: A Guide for Landlords

14th June 2025

After a difficult few years marked by rising mortgage costs, tax changes and tighter lending criteria, the buy to let market is beginning to stabilise in 2025. Rental demand across the UK remains exceptionally high, vacancy rates are low and average rents have risen significantly over the past three years. For landlords who are managing their finances carefully, buy to let still represents a viable long-term investment strategy.

However, the market in 2025 is very different from the environment of a decade ago. This guide covers what landlords need to know when it comes to buy to let mortgages.

Buy to Let Mortgage Rates in 2025

Buy to let mortgage rates rose sharply from 2022 onwards in line with the Bank of England base rate. Rates peaked in late 2023 and early 2024 and have since come down as the base rate has been reduced. However, buy to let mortgages carry a premium over equivalent residential products and rates remain substantially higher than the historic lows seen in 2020 and 2021.

The rental income coverage requirement — where lenders require the rent to cover a certain multiple of the mortgage interest — means some properties that were viable at lower rates do not stack up at current levels. Lenders typically require rental income of 125% to 145% of the monthly mortgage payment, often calculated at a stressed rate higher than the actual product rate.

For landlords seeking a new buy to let deal, comparing the whole market is essential. Rates and criteria vary significantly between lenders, and specialist buy to let lenders often offer products not available through high street banks.

The Stamp Duty Surcharge

Landlords and second home buyers pay an additional surcharge on top of standard stamp duty rates when purchasing a property. From October 2024, this surcharge increased from 3% to 5% as announced in the Autumn Budget.

On a buy to let purchase of £200,000, the additional surcharge adds £10,000 to the stamp duty bill. At £350,000, the surcharge adds £17,500. This is a significant increase in the cost of building or expanding a portfolio and has prompted some landlords to reconsider acquisitions.

Portfolio Landlords

If you own four or more mortgaged buy to let properties you are classified as a portfolio landlord. Since 2017, lenders assessing applications from portfolio landlords are required to consider the financial position of the entire portfolio, not just the property being purchased or remortgaged. This means landlords need to provide more detailed information and documentation when applying.

Some lenders are more experienced and willing to work with portfolio landlords than others. A specialist buy to let mortgage broker will know which lenders are best suited to your specific portfolio structure and can help you present your case effectively.

Limited Company Buy to Let

A growing number of landlords are choosing to purchase properties through a limited company structure rather than in their personal name. The main reason is the tax treatment of mortgage interest: companies can still deduct mortgage interest as a business expense, whereas individual landlords saw this relief phased out between 2017 and 2020 and are now only able to claim a basic rate tax credit.

Limited company buy to let mortgages typically carry higher rates than personal buy to let products, and there are additional costs associated with running a company. However, for higher-rate taxpayers with multiple properties, the tax advantages can outweigh these costs. You should take independent tax advice before making this decision.

Energy Performance and EPC Requirements

The government has indicated that minimum energy efficiency standards for privately rented homes will be tightened in the coming years, with proposals to require EPC ratings of at least C for new tenancies. While the exact timeline has shifted, landlords should be aware that properties with lower EPC ratings may require investment to remain lettable in the medium term.

Some lenders already offer preferential rates on energy-efficient properties (green mortgages). For landlords planning improvements, it is worth checking whether your lender has products that reward or support energy efficiency work.

Using a Specialist Buy to Let Mortgage Broker

Buy to let mortgage criteria are significantly more complex than for residential mortgages. Rental income calculations, portfolio assessments, limited company structures and the range of specialist lenders in the market all mean that working with an experienced broker can make a meaningful difference to the rate you secure and the ease of the application process.

To discuss your buy to let requirements with one of our advisers, please submit an online enquiry or call us on 0800 310 1340.

YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.