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Landlords taking out new mortgages can say thank you, Mr President, to Donald Trump for triggering the US-Iran War that is likely to cost them around £1,300 each in extra interest payments over the next year.
Since the start of the war on February 28 2026, the average £250,000 buy-to-let loan over 25 years has seen its interest rate rise from 4.66 percent to 5.45 percent.
Additional loan costs are expected to affect thousands of landlords looking to remortgage in the coming months.
Finance expert Rachel Springall of mortgage monitor Moneyfactscompare warned that such a massive, sudden rise in mortgage repayments in just over a month could wipe out some landlords.
"Tough times are ahead for landlords as the profitability of buy-to-let has been damaged due to tighter legislation, and with rising running costs eating into profit margins, it is squeezing them from all sides," she said.
"Repossessions of buy-to-let properties are up by 10 percent year-on-year, and it is worrying to think that landlords could be failing to keep up with mortgage repayments.
"In the months ahead, the cost of living is predicted to worsen, and this will be magnified if landlords are due to come off a cheap fixed rate, because mortgage rates have been rising.
"Rising costs this year could lead to higher rental payments for tenants, or a drop in the pool of properties available for rent if landlords decide to sell up."
The warning comes as buy-to-let lender trade body UK Finance released details of how the market performed in the final quarter of 2025.
Lenders advanced 59,489 new buy-to-let loans worth £11.2 billion. This was up nearly a fifth in number and value compared with the same quarter in the previous year, with the growth largely concentrated in remortgaging.
Average gross buy-to-let rental yield in Q4 202 for the quarter was 7.18 percent, compared with 6.99 percent in the same quarter in 2024.
The number of fixed-rate mortgages outstanding in Q4 2025 was 1.46 million, 2 percent up on 12 months earlier. However, the number of variable-rate loans outstanding fell by 9.8 percent to 466,000.
The average interest rate across all new buy-to-let loans was 4.77 percent in Q4 2025, 8 basis points lower than the previous quarter and 32 basis points lower than the same quarter of 2024.
At the end of Q4 2025, 9,520 buy-to-let mortgages were in arrears greater than 2.5 percent of the outstanding balance. This was down 910 from the previous quarter.
Lenders repossessed 770 buy-to-let properties in Q4 2025, up 10 percent from 700 in the same quarter a year previously.