Britain’s beleaguered landlords have been dealt a fresh setback after Virgin Money and Clydesdale Bank confirmed they are quitting the buy-to-let mortgage market, a move brokers have branded “another crushing blow” to an already squeezed sector.
Clydesdale quietly pulled its new business buy-to-let range in March and will not reintroduce the products. Virgin Money will follow suit, closing the shutters on new buy-to-let applications at 8pm on 28 April.
The twin withdrawals come in the wake of Nationwide Building Society’s acquisition of both brands. Because the mutual already owns The Mortgage Works, one of the UK’s biggest specialist buy-to-let lenders, industry figures see the decision as a consolidation play, funnelling all landlord business into a single in-house arm rather than running competing propositions under one corporate roof.
The retreat lands at the worst possible moment for landlords wrestling with climbing borrowing costs. Fresh figures from Moneyfactscompare.co.uk show buy-to-let fixed rates have marched steadily higher since the beginning of March 2026, fuelled in part by fresh tensions in the Middle East rattling the swaps market.
The average two-year fixed buy-to-let rate now stands at 5.40%, its highest level in a year, while the five-year equivalent has hit 5.91%, a two-year peak. For a landlord taking out a £250,000 interest-only loan on a 25-year term, the jump translates to roughly £1,100 in additional borrowing costs on a two-year deal compared with early March.
Product choice is disappearing fast too. Around 1,300 buy-to-let deals have vanished from shelves since the start of March, with the total now sitting below 5,000 for the first time since November 2025.
Add in the looming Renters’ Rights Act, which takes effect this May, and the requirement for rental properties to achieve an EPC rating of C by October 2030, an upgrade expected to cost landlords up to £10,000 per property, and the pressures are mounting from every direction.
Ben Perks, managing director at Stourbridge-based Orchard Financial Advisers, pulled no punches. “Another crushing blow to landlords. Landlords already face higher rates, eye-watering fees and now they have a reduced choice of lenders to go to,” he said. “The more lenders in any space, the better, as competition breeds better criteria and helps a wider array of borrowers. It’s always sad to see lenders exit a market.”
Jack Tutton, director at Fareham-based SJ Mortgages, warned the loss of two flexible lenders will bite hardest at landlords who fall outside The Mortgage Works’ lending box. “Virgin and Clydesdale withdrawing from the buy-to-let mortgage market can only be seen as bad news for landlords. Less competition in what is already a difficult market will only make it harder to make buy-to-let properties justifiable,” he said. “Both lenders’ policies opened up more options to landlords compared to The Mortgage Works. It is likely to mean a more expensive mortgage for people who do not meet The Mortgage Works’ lending rules.”
David Stirling, independent financial adviser at Belfast-based Mint Wealth, echoed the concerns. “Losing a lender is never a good day for mortgage brokers. It’s not just about having fewer options on the sourcing system but the loss of distinct criteria that help us find solutions for clients who don’t always fit a standard mould,” he said. “Consolidating down to just The Mortgage Works within the group does narrow the field. In a market where landlords are squeezed harder and harder, every option counts.”
Justin Moy, managing director at Chelmsford-based EHF Mortgages, believes the rationalisation was only a matter of time, and warns that more is coming. “An inevitable decision when lenders merge together,” he said. “Both Virgin and Clydesdale had popular reputations amongst brokers and buy-to-let borrowers alike, so the withdrawal will limit choices for many landlords. This will not be the last round of consolidation within the mortgage market, only adding to the woes of property investors.”
Not every voice in the industry is sounding the alarm. Martin Rayner, director at Compton Financial Services, argues the decision reflects commercial logic rather than a wider loss of faith in the sector. “This is less about lenders pulling back from buy-to-let, and more about commercial streamlining following Nationwide’s acquisition of Virgin Money and Clydesdale. Nationwide already has a dedicated buy-to-let arm in The Mortgage Works, so it makes little sense to run competing brands within the same group.”
He added: “Higher rates, tax changes and increased regulation are all putting pressure on landlords, but this decision is not directly driven by those factors. Buy-to-let isn’t dying, it’s evolving. There are still plenty of lenders and options available, particularly for well-structured and professionally run portfolios.”
For now, landlords and their brokers will be watching closely to see which lenders step in to fill the gap, and whether rival banks spot an opportunity as one of the country’s biggest mutuals tightens its grip on the specialist end of the market.
