Virgin Money and Clydesdale Exit Buy-to-Let Mortgage Market
In a significant development for the property sector, Virgin Money and Clydesdale Bank have announced they will no longer offer new buy-to-let mortgages, a move described by experts as another crushing blow to landlords. This decision comes amid a period of rising borrowing costs and reduced product availability in the buy-to-let market.
Timeline of Withdrawals and Market Impact
Clydesdale Bank withdrew its new business buy-to-let products in March 2026, with no plans for reintroduction. Virgin Money will follow suit, ceasing new buy-to-let mortgage offerings at 8pm on 28 April 2026. This consolidation follows Nationwide's acquisition of both Virgin Money and Clydesdale, as Nationwide already operates a dedicated buy-to-let arm through The Mortgage Works. Experts suggest this move is aimed at streamlining landlord services under a single brand, potentially limiting competition.
Soaring Mortgage Rates and Declining Product Choice
Concurrently, buy-to-let fixed mortgage rates are experiencing sharp increases, driven by geopolitical unrest in the Middle East, according to recent data from Moneyfactscompare.co.uk. Average rates for two-year fixed terms have risen to 5.40%, the highest level in a year, while five-year fixed terms have reached 5.91%, a two-year peak. For landlords with a £250,000 loan over 25 years, borrowing costs for a two-year fixed deal are now approximately £1,100 higher compared to early March 2026.
Product availability has also plummeted, with around 1,300 fewer buy-to-let deals since the start of March 2026. Overall choice has dipped below 5,000 products for the first time since November 2025, exacerbating challenges for landlords seeking financing.
Additional Pressures on Landlords
Landlords are facing further regulatory and financial burdens. The Renters' Right Act, set to take effect in May 2026, introduces new requirements for rental properties. Additionally, landlords must invest up to £10,000 to achieve an Energy Performance Certificate (EPC) rating of C by October 2030, adding to operational costs.
Expert Reactions and Market Sentiment
Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, commented to Newspage, labeling the withdrawal as yet another hit for landlords. He emphasized that landlords are already grappling with higher rates and substantial fees, and reduced lender options will only worsen the situation. Competition breeds better criteria and helps a wider array of borrowers, he noted, expressing disappointment over lenders exiting the market.
Jack Tutton, Director at Fareham-based SJ Mortgages, echoed these concerns, stating that Virgin and Clydesdale's exit is bad news for landlords. He highlighted that both lenders offered more flexible policies compared to The Mortgage Works, and their departure could lead to more expensive mortgages for those who do not meet The Mortgage Works' lending criteria, further squeezing landlords in an already difficult market.
The combined effect of lender withdrawals, rising rates, and regulatory changes is creating a challenging environment for buy-to-let investors, with experts warning of reduced affordability and limited options in the foreseeable future.
