Knight Frank has warned that rising gilt yields and a fresh political risk premium could push up mortgage pricing for landlords later this year, adding pressure to remortgages, purchases and refinancing decisions across the buy-to-let market.
The new warning comes as the agency cut its house price forecasts and said the key issue is no longer just Bank Rate expectations, but whether bond markets start pricing in looser public spending and stickier inflation. For landlords, that matters because higher gilt yields tend to feed through into swap rates, which lenders use to price fixed mortgage deals.
That timing matters now. Many landlords are already weighing whether to refinance before autumn, and the latest warning suggests waiting for cheaper debt could prove risky if wholesale funding costs keep climbing.
Swap rates are back in focus for landlords
Tom Bill, head of UK residential research at Knight Frank, said the housing market was coming under pressure from higher borrowing costs, energy price risks and political uncertainty. In its latest market note, the agency said the 10-year gilt yield has been trading above 5 percent, its highest level since the financial crisis.
For landlords, the practical issue is simple: fixed-rate buy-to-let pricing does not move on Bank Rate alone. If bond markets demand a higher return to lend to the UK, lenders can end up repricing even if the Bank of England has not moved.
That is why this matters beyond headline politics. A landlord coming off a low fixed deal this summer may find the hoped-for rate relief arrives more slowly than expected if swap markets stay elevated.
This follows Landlord Knowledge’s March report on landlord borrowing costs hitting a 19-month high, which showed how quickly wholesale market moves were feeding into buy-to-let pricing. The latest Knight Frank warning suggests that pressure has not gone away and could intensify if bond market nerves build again.
House price outlook cut as funding pressure builds
Knight Frank has also downgraded its house price forecasts across UK markets, arguing that higher financing costs are likely to weigh on values and, to a lesser extent, transaction volumes. That does not automatically mean a sharp correction, but it does point to a slower market in which finance discipline matters more.
Landlords deciding whether to expand, sell or sit tight may therefore need to focus less on broad election noise and more on lender repricing risk. That is especially true for borrowers who need certainty on refinance timing or who were banking on a more aggressive run of rate cuts.
There is also a clear split within the market. Better-capitalised landlords may still find chances if weaker buyer demand softens prices, while highly geared investors could see thinner margins if funding costs stay higher for longer. Landlords should also keep an eye on Landlord Knowledge’s recent coverage of inflation and rate-cut expectations, because softer CPI on its own may not be enough to deliver cheaper fixed borrowing if gilt markets move the other way. Knight Frank’s latest market note sets out why bond market pressure is now central to that outlook.
For landlords, the warning is not that rates are about to spike overnight. It is that mortgage pricing now depends on more than the next MPC meeting, and that makes funding plans harder to leave until the last minute.
What this means for landlords
- If you’re remortgaging this summer: watch swap-rate moves as closely as Bank Rate headlines, because fixed pricing can change before the MPC acts.
- If you’re buying: stress-test deals against slightly higher borrowing costs rather than assuming autumn finance will be cheaper.
- Watch for: lender repricing rounds if gilt yields stay above recent norms or political risk pushes market volatility higher.
- Bottom line: the cheapest time to refinance may not line up neatly with the next expected base rate cut.
Editor’s view
Landlords have spent months looking at Bank Rate as if it were the only number that matters. It is not. If bond markets stay jumpy, fixed-rate relief can be delayed even in a softer inflation backdrop.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 26 May 2026
Sources: Knight Frank
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