0:01 AM, 16th July 2025, About 5 months ago
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A decision last March by the Bank of England to relax its stress testing guidelines for mortgage affordability assessments has boosted the buy to let market, research reveals.
According to mortgage advisor, Alexander Hall, the regulatory changes have expanded borrowing options and improved affordability for landlords.
Previously, landlords seeking fixed-rate mortgages with terms under five years faced stress tests based on the lender’s Standard Variable Rate plus an additional 1%.
This restriction has now been removed, allowing lenders to evaluate applications using the specific terms of the chosen mortgage product.
The adjustment has created a more tailored and flexible approach to lending, enabling financial institutions to better align their criteria with individual borrower circumstances.
The firm’s managing director, Richard Merret, said: “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.”
He added: “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.”
The firm says the impact has been clear on the market’s growth and points to activity between January and June.
That’s when the average number of buy to let mortgage products available soared to 2,752, marking a 41.9% increase compared to the same period in 2024.
This growth outpaces other borrower categories, with first-time buyer products rising by 16.2%, remortgaging options by 3.2% and home mover products by just 2%.
Affordability has also seen significant gains.
The average two-year fixed BTL mortgage at 75% loan-to-value dropped to 3.93% in May, down from 4.78% two years earlier, reflecting a year-on-year decrease of 0.61 percentage points.
Notably, some lenders have introduced rates below 3%, making the sector increasingly attractive for property investors.
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