For many investors, the lower interest rate environment may tempt them to take on a BTL (Buy-to-Let) mortgage. The Bank of England’s latest interest rate cut to 4% – while small on paper, could have a disproportionately large impact on mortgage affordability, buyer confidence, and ultimately – housing market activity.

Why Rate Cuts Boost the Housing Market

Interest rates and the housing market are closely linked. Lower borrowing costs make it cheaper for buyers to secure mortgages, which tends to stimulate demand. This uptick in demand often leads to:

• More properties being purchased – first-time buyers, movers, and investors all see an opportunity to buy when mortgages are cheaper.
• Higher property prices – with more buyers competing for the same stock, prices can rise.
• Improved transaction volumes – estate agents, developers, and sellers experience increased market activity.

We’ve already seen early signs of this. Halifax reported in early August that July 2025 brought the fastest monthly house price increase of the year – up 0.4% to an average of £298,237 (The Guardian). Zoopla has also reported that buyer demand is 11% higher than the same time last year, with property sales up 8% (Zoopla).

Despite being the fifth reduction in a year, it doesn’t change the fact that:

1. It’s still a high rate for borrowers 
Compared to pre-pandemic levels, a 4% base rate means borrowing is still expensive, and makes it hard for a BTL borrower’s numbers to add up – especially those with smaller amounts of capital for a deposit.

2. Most BTL mortgages are interest-only
You’re usually only paying the interest, not reducing the capital owed. At the end of the term, you still have the original loan to pay off – often by selling the property, which means you lose the asset and the future income it could generate.

Depending on the time horizon and any unforeseen issues such as bad tenants or higher than expected renovation costs – plus the newly increased stamp duty costs, there is no guarantee that the whole process turns a profit.

3. Your money is working for the bank – not for you
Even at a lower rate, the bank is taking most, if not all of your monthly rental income. This erodes your net yield – meaning your passive income is smaller than it could be or worse, non-existent.

4. Your capital is tied up
With a mortgage, much of your initial capital is locked away as a deposit and you’re restricted by the mortgage terms.

The Find UK Property 2-Step Solution: A Smarter Alternative

At Find UK Property, we’ve developed a 2-Step Solution that provides the benefits of property investment for people without the full funds to purchase outright, but without the downsides of traditional mortgages. It is particularly powerful in today’s market.

1. No Interest – Ever

You don’t pay a penny in interest. This means every pound you invest is working for you, not for the bank.

2. Comparable Up Front Cost to a BTL Deposit

The initial investment required at Step 1 is similar to the deposit you’d put down on a buy-to-let mortgage – but rather than locking it into a mortgage arrangement and paying a percentage of your hard-earned seed capital, you’re using it to own property in a way that earns you a percentage on that capital – from day one.

3. Truly Passive Income

Find UK Property also take on all landlord responsibilities and costs – meaning you know exactly how much you will earn, contractually guaranteed in rental income at Step 2 – with no downside or unforeseen costs eating into it. 2 Steps – multiple benefits.