Why the market reset we saw in March is still shaping BTL lending today – Goodall

Over a month on, I think that assessment still holds true.

If anything, what has happened since has reinforced the idea that we are now operating in a market where volatility is no longer viewed as a temporary interruption of normal conditions, but increasingly the backdrop against which lenders, brokers and borrowers must make decisions.

That matters because market expectations have changed significantly in a relatively short period of time. At the start of the year, there was a broad assumption that the Bank of England would almost certainly deliver several bank base rate (BBR) cuts during 2026. Borrowers were becoming more comfortable with shorter-term fixes and tracker products because the direction of travel appeared relatively clear. Today, that certainty no longer exists.

This does not necessarily mean rates are about to rise sharply again, but it does mean lenders are having to operate in an environment where market sentiment and confidence can shift very quickly.

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Markets dislike uncertainty more than almost anything else

One of the biggest challenges for financial markets is not necessarily bad news itself, but the inability to confidently predict what happens next.

Over recent months, we have seen continuing instability in the Middle East, ongoing pressure on oil prices and now political uncertainty in the UK. Together, those factors have created a situation where markets are struggling to form a clear view on inflation and future monetary policy. That has direct consequences for mortgage pricing.

Even where swap rates improve temporarily, lenders are understandably cautious about reacting too quickly because there is now a very real possibility that movements reverse within days rather than weeks or months.

As a result, lenders are increasingly looking for sustained periods of stability before making meaningful pricing decisions. That naturally slows the pace of reductions and creates a more cautious approach across the market.

For brokers and their clients, this means expectations also need to adjust. The assumption that pricing will simply drift steadily lower throughout the remainder of the year now looks far less certain than it did earlier in 2026.

The BTL market remains more resilient than many assume

Despite the wider uncertainty, one area that continues to stand out is the resilience of the buy-to-let (BTL) purchase market. There is often a tendency to focus purely on negative headlines surrounding regulation, taxation or affordability pressures, but underneath that noise, there remains a consistent level of landlord activity.

We continue to see a significant proportion – approximately a third – of applications relating to purchases rather than purely refinancing activity, and wider market data supports that picture.

Recent research from Hamptons showed investor purchases increasing as landlords buy properties from other landlords, highlighting that professional investors are still identifying opportunities within the current market. That is an important point because it challenges the idea that landlords are simply exiting the sector altogether.

In reality, professional investors have historically shown a strong ability to adapt to changing conditions, whether that relates to tax policy, regulation, affordability pressures or financing structures.

The response to the Renters’ Rights Act is another good example. Rather than abandoning the market – as some commentators predict – many landlords are already adjusting tenancy structures and operational models to reflect the new environment. The sector evolves. It always has.

Mortgage brokers remain central in uncertain conditions

Periods like this also reinforce the value of professional advice. When markets are moving quickly, products are repriced frequently and borrower confidence becomes more fragile, brokers play a critical role in helping landlord clients make informed long-term decisions rather than reacting emotionally to short-term headlines.

That role is becoming even more important as technology and artificial intelligence (AI) continue to dominate discussion across the industry. AI will undoubtedly improve efficiency, reduce administration and support better processing across the mortgage market. However, the idea that technology alone can replace specialist BTL advice still feels some distance from reality.

Landlords are not simply choosing the lowest rate. They are balancing affordability, portfolio strategy, tax considerations, product structure and long-term investment planning. Those conversations still require experience, judgement and human interaction.

Stability and flexibility will define the rest of the year

The broader message for brokers and landlords is that this market may remain unsettled for longer than many initially expected. Even if some of the geopolitical pressures ease over the coming months, the wider effects on inflation expectations, lender behaviour and economic confidence are unlikely to disappear.

That means the focus for brokers should not simply be on predicting the next rate movement, but on helping clients remain flexible, realistic and prepared for a market that continues to adjust to a very different economic backdrop than the one many expected at the start of the year.