The latest research from award-winning mortgage adviser Alexander Hall has found that recent changes to stress testing rules are helping to rejuvenate the buy-to-let borrowing landscape, with product choice, affordability, and rate competitiveness all showing strong signs of improvement.
The changes follow an update from the Bank of England in March 2025, which eased the notional interest rate guidance used during mortgage affordability assessments. Previously, borrowers opting for fixed-rate products of less than five years were stress-tested at the lender’s Standard Variable Rate plus 1%. This requirement has now been lifted, giving lenders more flexibility to assess borrowers more accurately based on the actual product terms.
As a result, many major lenders have already revised their affordability criteria and whilst approaches vary by lender, the overall impact has been a more accessible and competitive environment for landlords.
It’s an improvement that is already being felt within the market. The average number of buy-to-let mortgage products available between January and June 2025 rose to 2,752, up 41.9% compared to the same period last year - the largest annual increase of all borrower groups.
By contrast, the number of mortgage products for first-time buyers increased by 16.2%, while those for remortgaging and home movers rose by just 3.2% and 2.0% respectively.
Rates have also improved significantly. The average 2-year fixed buy-to-let mortgage at 75% loan-to-value has fallen from 4.78% in May 2023 to just 3.93% in May 2025, a reduction of 0.85 percentage points over two years and 0.61 percentage points year-on-year.
In fact, in recent months, there have also been numerous examples of lenders providing sub-three percent rates on their buy-to-let mortgage products, further boosting the appeal of the sector where landlord investment is concerned.
These developments are expected to support increased investment activity across the buy-to-let sector, particularly among portfolio landlords and professional investors who have been most impacted by stricter affordability tests in recent years.
MD of Alexander Hall, Richard Merret, commented:
"The easing of stress testing rules is an important step forward for the buy-to-let sector. We’ve already seen a noticeable improvement in product availability and borrowing affordability, helping landlords better manage their portfolios and capitalise on new opportunities.
At a time when the rental market is under pressure from high demand and low supply, these changes offer a much-needed boost to investor confidence and market fluidity."
