Landlords Face Big Tax Rise in 2024 – What to Know Now: Discover how to prepare, reduce costs, and stay ahead of the property tax reforms set to take effect this April.

Mortgage Costs Rising for Buy-to-Let Landlords in 2024

This year, nearly 150,000 buy-to-let landlords will see a sharp rise in mortgage costs as their fixed-rate deals come to an end. According to recent data, 144,000 five-year fixed agreements will expire in 2024, forcing many landlords to remortgage at significantly higher rates than they secured in 2019.

Current vs. Future Mortgage Rates

Back in 2019, landlords enjoyed average mortgage rates of 3.5%. Today, projections by Capital Economics suggest those rates may rise to 4.5%-5%. For a landlord with a £150,000 interest-only mortgage, this could mean an extra £200 per month or £2,250 per year.

Challenges in Refinancing

Darryl Dhoffer from The Mortgage Expert points out that landlords coming off lower rates will significantly increase their repayments. He warns that some could see a rate increase of three percentage points, boosting monthly payments by £450 on a £150,000 loan.

Impact of Tax Changes

The removal of full mortgage interest tax relief under Section 24 continues to affect profitability for many landlords, especially those in higher tax brackets. Unlike before 2017, landlords can no longer deduct all mortgage interest as a business expense, significantly reducing net income.

Many landlords are exploring limited company buy-to-let structures as an alternative. This route enables mortgage interest to be treated as a business expense, thereby restoring tax efficiency. For full guidance, visit our Buy-to-Let Through Limited Company guide.

Anticipated Rent Increases

According to Michelle Lawson from Lawson Financial, landlords ending their five-year deals are likely to raise rents to protect margins. Rising taxes, higher mortgage rates, and increasing compliance costs all contribute to this growing pressure.

Wider Mortgage Trends

UK Finance estimates that over 210,000 buy-to-let mortgage holders will reach the end of their fixed deals in 2024. Unexpected hikes will also hit an additional 35,000 landlords who took out two-year fixes in 2022.

A landlord who previously paid a 2.59% rate in 2020 may now face rates of 4.6%, adding £127–£252 to monthly payments on a typical £150,000 loan.

What’s Changing in 2025?

From April 2025, further tax changes are expected. These may include:

• Reduced capital gains tax allowances

• Changes to inheritance tax exemptions

• Continued removal of tax reliefs on finance costs

This will have a substantial effect on landlords still adapting to Section 24, increasing the appeal of operating via a company structure and demanding strategic planning in 2024.

How Landlords Can Prepare in 2024

Smart landlords are already taking proactive steps in early 2024. Key strategies include:

• Reviewing fixed-rate end dates and refinancing early

• Exploring limited company buy-to-let models with tax advisers

• Working with brokers from a specialist mortgage network for access to exclusive deals

• Adjusting rental prices based on market benchmarks

• Stress-testing finances for void periods and higher costs

Additional 2024 Considerations for UK Landlords

1. EPC Regulations & Energy Efficiency

The government may delay new EPC rules, but many lenders in 2024 are already prioritising properties rated EPC C or higher.

What to do now:

• Commission updated EPC assessments

• Upgrade insulation, windows, or boilers

• Explore green mortgage incentives through specialist mortgage networks

2. Stress Testing & Lending Criteria

In 2024, affordability stress tests remain tight. Most lenders are applying 5.5%–7% rates for income calculations—even if actual borrowing rates are slightly lower.

To improve affordability:

• Opt for interest-only mortgages where appropriate

• Consolidate properties into limited companies for lower tax exposure

• Maximise rental income through yield improvements or HMO strategies

3. Portfolio Risk: Void Periods & Tenant Arrears

Economic pressures are increasing the risk of tenant default or long void periods.

Best practices for 2024:

• Keep 3–6 months’ cash reserves

• Use rent guarantee insurance

• Work with letting agents who offer eviction protection and credit-checked tenants

4. Broker Support and Network Affiliation

Landlords and advisers alike benefit from brokers who are part of a mortgage network offering access to exclusive rates, niche lenders, and faster processing.  If you’re entering the market or scaling up, consider advisers within the network to support newly qualified advisers.

Future Outlook

Despite these challenges, Capital Economics forecasts that rates might fall below 4.5% by the end of 2024, offering some relief. This scenario is brighter than those who refinanced after the economic upheaval following Liz Truss’ mini-budget in late 2022.

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Frequently Asked Questions for Landlords in 2024