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The latest research from London lettings and estate agent, Benham and Reeves, has revealed that the average monthly cost of a buy-to-let mortgage has climbed by as much as 64% over the last decade, as landlords continue to face mounting financial pressure alongside sweeping reforms introduced via the Renters\u2019 Rights Act.<\/p>\n
Benham and Reeves analysed the change in buy-to-let mortgage costs over the last 10 years based on the average UK house price, assuming a 25% deposit and a 25-year mortgage term, comparing both full repayment and interest-only repayment structures using the average mortgage rate available a decade ago versus today.<\/p>\n
The research shows that the average UK house price has increased from \u00a3191,298 a decade ago to \u00a3267,957 today, a rise of 40.1%.<\/p>\n
As a result, the average buy-to-let landlord now requires a mortgage loan of \u00a3200,968 after placing a 25% deposit of \u00a366,989, compared to a loan requirement of \u00a3143,474 a decade ago.<\/p>\n
At the same time, the average buy-to-let mortgage rate has increased from 3.19% to 3.73%.
\nCombined, these factors have caused the average monthly cost of a full repayment buy-to-let mortgage to climb from \u00a3695 per month to \u00a31,031, an increase of 48.4% or \u00a3336 per month.<\/p>\n
However, the sharpest increase has been seen amongst landlords using interest-only mortgages, which remain a popular option across the buy-to-let sector due to lower monthly repayment costs and stronger rental yield potential.<\/p>\n
Over the last decade, the average monthly cost of an interest-only buy-to-let mortgage has climbed from \u00a3381 per month to \u00a3625 per month, an increase of 63.8%, equivalent to an additional \u00a3243 every month.<\/p>\n
Over the course of a standard two-year fixed mortgage term, this means landlords are now paying an estimated \u00a35,839 more in mortgage costs compared to a decade ago.<\/p>\n
Marc von Grundherr, Director of Benham and Reeves, commented:<\/strong><\/p>\n \u201cThe buy-to-let sector has faced a relentless stream of challenges over the last decade and landlords are now contending with substantially higher mortgage costs at the same time as sweeping legislative reform via the Renters\u2019 Rights Act.<\/p>\n \u201cWhile house prices have increased considerably over the last 10 years, higher borrowing costs have further intensified the financial burden facing landlords and this has been particularly notable for those utilising interest-only mortgages, which have traditionally formed a large part of the buy-to-let market.<\/p>\n \u201cMany landlords have already absorbed significant increases in operational costs in recent years, from taxation changes and licensing requirements through to energy efficiency regulations and wider compliance obligations.<\/p>\n \u201cDespite this, the sector continues to demonstrate resilience because rental demand remains extremely strong and, in many parts of the country, vastly outweighs the level of available stock.<\/p>\n \u201cOf course, there is a tipping point and continued upward pressure on costs will inevitably influence investment decisions across the sector. However, well-positioned landlords with quality stock continue to perform strongly, particularly within markets where tenant demand remains robust.\u201d<\/p>\n Average UK house price sourced from Gov UK House Price Index comparing figures from a decade ago versus latest available figures. (March 2016 to March 2026 – latest available). The latest research from London lettings and estate agent, Benham and Reeves, has revealed that the average monthly cost of a buy-to-let mortgage has climbed by as much as 64% over the last decade, as landlords continue to face mounting financial pressure alongside sweeping reforms introduced via the Renters\u2019 Rights Act. Benham and Reeves analysed … <\/p>\n\n\n\n
\n \nUnited Kingdom – 2016<\/th>\n United Kingdom – 2016<\/th>\n United Kingdom – latest<\/th>\n Change \u00a3<\/th>\n <\/th>\n<\/tr>\n<\/thead>\n \n \nVariable<\/th>\n Price \/ % \/ info<\/th>\n Price \/ % \/ info<\/th>\n Change \u00a3<\/th>\n Change %<\/th>\n<\/tr>\n<\/thead>\n \n Average property price (Gov – Mar 2016)<\/td>\n \u00a3191,298<\/td>\n \u00a3267,957<\/td>\n \u00a376,659<\/td>\n 40.1%<\/td>\n<\/tr>\n \n Deposit at 25%<\/td>\n \u00a347,825<\/td>\n \u00a366,989<\/td>\n \u00a319,165<\/td>\n 40.1%<\/td>\n<\/tr>\n \n Mortgage loan required<\/td>\n \u00a3143,474<\/td>\n \u00a3200,968<\/td>\n \u00a357,494<\/td>\n 40.1%<\/td>\n<\/tr>\n \n <\/td>\n<\/tr>\n \n Ave mortgage rate (Mar 2016) (Bank of England)<\/td>\n 3.19%<\/td>\n 3.73%<\/td>\n –<\/td>\n 0.54%<\/td>\n<\/tr>\n \n Term<\/td>\n 25 years<\/td>\n 25 years<\/td>\n –<\/td>\n –<\/td>\n<\/tr>\n \n <\/td>\n<\/tr>\n \n Est Full repayment (per month)<\/td>\n \u00a3695<\/td>\n \u00a31,031<\/td>\n \u00a3336<\/td>\n 48.4%<\/td>\n<\/tr>\n \n Est Interest only payment (per month)<\/td>\n \u00a3381<\/td>\n \u00a3625<\/td>\n \u00a3243<\/td>\n 63.8%<\/td>\n<\/tbody>\n<\/table><\/div>\n \n
\nAverage mortgage rates sourced from the Bank of England.
\nMortgage repayment estimates based on a 25% deposit and 25-year mortgage term.\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"