More lenient buy-to-let stress tests are rejuvenating the market with more product choice and lower rates, research from mortgage adviser Alexander Hall has found.
In March 2025 the Bank of England lifted the requirement for borrowers opting for a fixed rate of less than five years to be stress tested at a lender’s standard variable rate plus 1%.
The effects of the changes have already been felt within the market, as the average number of buy-to-let mortgage products available between January and June 2025 rose to 2,752, up 41.9% compared to the same period last year.
Rates have also improved significantly, as the average 2-year fixed buy-to-let mortgage at 75% loan-to-value has fallen from 4.78% in May 2023 to just 3.93% in May 2025, a reduction of 0.85% over two years and 0.61% year-on-year.
Richard Merret, managing director of Alexander Hall, 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.
“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.”
These lower rates should result in more investment activity across the buy-to-let sector, particularly among portfolio landlords and professional investors who have been most impacted by stricter affordability tests in recent years.
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