The BTL mortgage outlook over 2026 – Sedgwick

Despite the year now being more than halfway through, that still leaves a substantial volume of business for brokers, with many landlords refinancing across multiple properties as they return to a market where borrowing costs are significantly higher than when many of those deals were originally fixed at historically low rates. 

That change in conditions is what makes this refinancing cycle more involved than a simple product replacement exercise. 

Events far beyond the UK are increasingly feeding through into pricing, shaping expectations for interest rates and influencing swap rates, which underpin the pricing of fixed rate mortgages. 

We know how disruptive it can be when lenders reprice or withdraw products at short notice, but in volatile funding markets, those decisions can be unavoidable if lending is to remain sustainable.

We’ve seen swaps start to move in the right direction but, at the time of writing, this is a new development prompted by an emerging peace deal between the US and Iran. Even so, recent experience is a reminder that market conditions can change quickly and mortgage pricing can move with them. 

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That is why advice now has to stretch further than identifying the lowest available rate on the day. 

The affordability challenge

Many borrowers are transitioning from rates that were below 3% just a few years ago into a market where pricing is substantially higher today, so for some landlords, affordability will be the immediate the challenge. 

Alongside levers like different fee options, where product transfers are available, they can help smooth the move from one rate environment to another with less friction and without the additional time, cost and administration of a full remortgage. 

And if we do see rates continue to edge down as stability gradually returns to the economy, some landlords may prefer to keep a close eye on the market for a period, particularly if they believe pricing could ease further as the year progresses. 

Variable rate options can support that approach, especially where they offer flexibility without early repayment charges. Our bank base rate (BBR) tracker mortgage is one example, giving landlords the option to track the market and switch into a fixed rate when the timing feels right. 

Shifting priorities

Understanding the client’s next move is important, but so is the direction of travel for the wider portfolio and how today’s recommendation fits into that.

In practice, that means moving from a purely transactional approach to one that is built around ongoing relationships, where brokers are not only supporting the immediate refinancing decision but positioning themselves to retain and develop that business over time. 

Refinancing is no longer just about managing finance costs, but increasingly about funding the next stage of a landlord’s plans. In some cases, that means funding improvements; in others, reshaping a portfolio or backing the next acquisition. It also intersects with the regulatory agenda now coming into view. 

Alongside the Renters’ Rights Act, with phase two seeing the introduction of the Decent Homes Standard and Awaab’s Law, proposed Minimum Energy Efficiency Standards (MEES) changes will require significant investment across the sector.

Government data suggests over two million rented homes currently sit below Energy Performance Certificate (EPC) C, with modelling leading to estimates of average upgrade costs of £5,400 to bring each property up to the proposed new standards.

This all points to a clear role for brokers not only in sourcing finance, but in helping landlords plan, prioritise and stage those changes over time.