A recent article on LandlordZONE warned landlords to “crunch the numbers” in light of shifting market conditions. With renewed pressure on house prices — particularly in London, as predicted by Hamptons — it’s vital for landlords planning to renew fixed rate mortgages to understand how loan-to-value (LTV) impact on the amount they will have to pay.
For those who don’t take the time to re-assess, a property that once seemed a robust investment could quietly turn into a financial liability.
This is particularly important for London property owners planning to renew mortgage terms in the next 3 years with Hamptons anticipating a flat growth (0%) across Greater London in 2026 as the market digests recent tax changes.
What is Loan-to-Value?
The term loan-to-value ratio refers to the percentage of a property’s value that is financed by a mortgage loan. In simple terms:
- If you own a property valued at £200,000 and your mortgage (or “loan”) outstanding is £150,000, the LTV ratio is 75%.
- The remainder — in this case £50,000 — represents your equity (the part of the property you “own” outright).
Lenders monitor LTV closely because a higher LTV (i.e. less equity, more debt relative to value) represents greater risk. When house prices fall, that ratio can shift because the “value” in the denominator has dropped.
How Falling House Prices Can Impact on Existing Landlords
If house prices soften — as expected in London, under current forecasts — landlords looking to renew fixed term mortgages could find their costs dramatically increased with no option to adjust rents in response with the enforcement of Section 13 rent controls:
- Higher costs: As the LandlordZONE article highlights, when LTV rises because “property prices have softened in your area,” refinancing when a current mortgage deal ends may become “more difficult or more expensive”.
- Less options: A higher LTV can reduce options — fewer favourable deals, higher interest rates, or even difficulty rolling over mortgages.
Hamptons predict property price growth below the current rate of inflation (3.4 – 3.8% as of Dec 2025) in the following areas.
| Q4 2025 (f) | Q4 2026 (f) | Q4 2027 (f) | Q4 2028 (f) |
| London | -0.5% | 0.0% | 1.0% | 0.0% |
| East of England | 2.0% | 0.5% | 1.0% | 0.5% |
| South East | 1.0% | 0.5% | 1.0% | 0.5% |
| South West | 1.5% | 1.5% | 1.0% | 1.0% |
Economists forecast inflation to fall to 2.1% – 2.3% by Q4 2026 but even IF it does reach those levels, if inflation remains higher than nominal price growth, the “real value” of your equity could stagnate or shrink.
Around 600,000 borrowers on low rate fixed mortgage rates will need to renew their terms in 2026 and 2027. Borrowers in these areas may find the LTV values used to calculate mortgage costs increase in these areas.
Landlords in these areas who face rising taxes and growing compliance costs should start planning now if they need to renew their mortgage in the next three years. It’s vital to ensure their properties will still be profitable before the Renters’ Rights Bill comes into force in May 2026, when leaving the PRS will become more difficult.
What Landlords Should Do — and How to Crunch the Numbers
- Re-value your properties now. Use the latest market data or a professional valuation to get an updated estimate of current value.
- Recalculate your LTV using the new value — and compare with when you bought the property or last refinanced.
- Stress-test your finances: consider what happens if values drop another 5–10%. Could you still refinance? Would you have to top up payments?
- Watch policy changes and tax pressures. As recent budgets have shown, tax hikes — on rental income or high-value homes — add to the financial squeeze.
- Use an LTV calculator -e.g. this one from MoneySuperMarket (or search “LTV calculator” to find similar tools).
For those who don’t take the time to re-assess, a property that once seemed a robust investment could quietly turn into a financial liability.
In short: crunch the numbers now — and don’t assume yesterday’s equity still exists today.
If you would like help valuing properties you might want to sell before May 1st 2026, tell us more about your properties using the button below.