Buy To Let News

The UK buy-to-let remortgage market is poised for a period of significant activity, presenting an exciting opportunity for landlords and mortgage advisers alike.

With a new government now in place, it’s fair to say that landlords are anticipating potential changes that could impact their investments. So, here at Foundation Home Loans, we sought to understand landlords' expectations through our Q2 2024 Landlord Trends report, conducted by Pegasus Insight.

Despite challenges across the buy-to-let market, it’s always encouraging to see landlord’s ongoing commitment and desire when it comes to maintaining profitability and expanding their portfolios.

Rent controls and legislative change, such as the removal of Section 21 (no fault evictions), are hot topics in the current UK buy-to-let market as they hold potentially significant implications for both landlords and the intermediary market.

The UK buy-to-let market continues to witness a significant shift towards the use of limited companies for property ownership and management. A shift which was highlighted in the Pegasus Insight Landlord Trends research report for Q2 2024.

In our Q2 2024 BTL barometer, brought to you in conjunction with the Pegasus Insight Landlord Trends research report, we evaluate the trends which are impacting your landlord clients and how their portfolios are currently shaping up.

I'm sure that every homeowner and landlord would choose to own the most energy-efficient properties. However, the reality is that a large portion of the UK housing stock was not originally constructed to high energy efficiency standards, aside from new builds, and many have not been upgraded for various reasons.

Coming into 2024, there was little surprise in the fact that a record number of buy-to-let companies had been set up over the course of the year. 

Diversification has always been a key word for any successful portfolio, and thanks to their resilience to voids, now semi-commercial/part-commercial (Mixed use) properties are joining HMOs and MUFBs in landlords’ plans.

The market has successfully navigated its way through regulation, the credit crunch, increased regulatory scrutiny, the pandemic and the infamous mini-budget.

While we have seen rates come down from their 2023 highs, a large number of landlords are coming to the end of their current deals throughout 2024 and these landlords are looking for a range of solutions to keep down any increases in mortgage costs experienced.

In an ideal world, 100% of landlords would opt to deliver the most energy efficient property possible for their tenants. 

Confidence, profitability and tenant demand are three key areas within any successful portfolio offering and when evaluating the current state of play across the buy-to-let sector. So let’s tackle these three key areas via insights from the Q1 2024 Pegasus Insight Landlord Trends research report.

In our Q1 2024 BTL barometer, brought to you in conjunction with the Pegasus Insight Landlord Trends research report, we evaluate the trends which are impacting your landlord clients and how their portfolios are currently shaping up.

Moving into 2024, we noted plenty of encouraging signs emerging from landlords who were demonstrating their ongoing commitment to the buy-to-let sector and looking through a longer-term lens regarding the performance and potential of an array of property investment types.

‘Why a movie poster campaign?’ you might ask.

Every mortgage tells a story. Whether that’s a family buying their forever home or a buy-to-let landlord using mortgage finance to grow an exciting business.

Landlords, and the private rented sector in general, have become accustomed to some constant buffeting over the years, be this through regulatory and legislative change, global events and/or domestic economic headwinds.

Like any lender, it’s crucial to ensure that intermediary partners fully appreciate our strengths from a product, criteria and service perspective as lines can sometimes become a little blurred, especially when operating under the ‘specialist’ banner.

As we enter a crucial Spring season for the housing and mortgage market, it will be interesting to note any transactional uplift when it comes to borrowing types, property types and on a regional basis.

For some time, there has been a widely-held opinion that a significant number of landlords are seeking to make their exit from the private rental sector (PRS), forced out by higher rates, greater costs of running properties, and taxation policies which impact on overall profitability.

One area of the buy-to-let mortgage market, and landlord borrowers’ place within it, which will be clearly noticeable to advisers – particularly over the last 12-18 months – is the nature of rates and their impact on affordability, mortgage costs, and ultimately the profitability of those properties.

When appraising our Landlord Panel research in its entirely, one common element which springs out is a renewed sense of calm across the buy-to-let market and some strong foundations on which to build over the course of 2024.

Moving into 2024, there appears to be a rising amount of well-placed optimism emerging from those landlords who remain committed to growing their portfolios and staying in the sector for longer.

There’s no doubting 2023 was a challenging year for landlord borrowers and that a much higher interest rate environment presented the bulk of those challenges, particularly for those who were coming off deals and rates from two/three/five years’ back when we had historically low rates.

With the rise of the staycation, is this sun-drenched imagery still working? If research from Sykes Holiday Cottages is anything to go by, this gimmick now needs far more strings to its bow as holidays and breaks within our very own shores remain a highly attractive option for a strong proportion of the population.

We’ve seen a huge amount of news devoted to the additional financial pressure being placed on both homeowners and tenants across the UK.

We evaluate the trends which are impacting your landlord clients and how their portfolios are currently shaping up.

The first day of February saw the Bank of England’s Monetary Policy Committee (MPC) vote to hold the base rate at 5.25%, for a fourth consecutive time.

With the goal posts changing towards the back end of 2023, this leads to the question - how have landlords responded to this EPC U-turn?

Forecasting the year ahead in the mortgage market is not an envious task. As we know from recent years, there are always likely to be some significant events and market movements which often mean there is no such thing as a ‘business as usual’ year on which to predicate such forecasts.

The fact that 2023 saw a record number of buy-to-let companies being set up is likely to come as no surprise to intermediary firms who have had any landlord interaction over the past few years

As we reach the end of the year, there appear to be a number of positive trends emerging in and around the buy-to-let market and private rental sector (PRS). Trends which certainly bode well for the next 12 months and hopefully beyond.

The dynamics of the buy-to-let sector continue to change in line with economic influences, market forces, not to mention landlord and tenant demands. 

In recent weeks we’ve seen some important changes to the proposed introduction of increased Minimum Energy Efficiency Standards for rental properties.

In our Q3 BTL barometer, brought to you in conjunction with the latest BVA BDRC Landlord Panel research, we evaluate the trends which are impacting your landlord clients and how their portfolios are currently shaping up.

The UK remains obsessed with the property market. Be this in the form of house prices, rents, the costs associated with borrowing and the margins for landlords. And while yields remain strong, there’s an ever-changing array of additional costs which landlords have to carefully account for.

The future can be quite uncertain in terms of Government intervention on moving the minimum EPC level within the private rental sector to C, from either 2025 for new tenancies or 2028 for existing ones.

As we enter the Autumn season following an unexpected early September heatwave, it's a crucial period for the BTL sector, which has faced a fair share of heat from various angles, including the market, economic factors, and interest rates.

The popularity of owning buy-to-let properties though a limited company structure is evident and they have become increasingly prominent from both a tax efficiency perspective and in terms of lower levels of stress testing by many lenders.

With relatively low levels of activity currently being experienced across the residential housing market, more and more attention is being focused on the buy-to-let sector.

In our Q2 BTL barometer, brought to you in conjunction with the latest BVA BDRC Landlord Panel research, we evaluate the trends which are impacting your landlord clients and how their portfolios are currently shaping up.

Will landlords make the required improvements to meet EPC standards? 25% say they would not carry out any works and either sell the property or not re-let it.

Given the significant economic upheaval witnessed in recent times, many landlords throughout the UK have undertaken a thorough review of their financial standing, the efficacy of their property portfolios, and, in certain instances, reconsidered their short-term, medium-term, and long-term buy to let objectives.

With Foundation Home Loans - Check out these first 4 ways 

It’s fair to say that our working lives, the way get paid and the jobs we do is changing, recent research by Censuswide revealed that one in 10 UK employees which is approximately 4.5 million people were considering taking a second job or already have done

Taking a step back in time for a moment, throughout the mortgage market, the two-year fixed rate product largely reigned supreme.

There may have been a perception that ‘accidental’ or more ‘unintentional’ landlords make up a high proportion of the landlords’ community, our data reveals the truth

One of the most consistent property types in delivering the highest yields in recent years has been houses in multiple occupation (HMOs) - but is it still an attractive option?

The data reveals that two-thirds of landlords arranged their most recent BTL mortgage via a mortgage intermediary – discover who needs your help

Many lenders have been highly proactive and innovative in the way they have engaged with the intermediary and landlord communities around the potential benefits attached to green mortgages in recent times.

In our latest quarterly BTL barometer, brought to you in conjunction with the latest BVA BDRC Landlord Panel research, we evaluate the trends which are impacting your landlord clients and how their portfolios are shaping up on the back of some challenging economic conditions.

As an intermediary-only lender, we fully understand the importance of the advice process, and this has become increasingly apparent in a buy-to-let marketplace which got that little bit tougher for landlords and a little lighter when it comes to confidence levels of the back of well-documented events over the later part of Q3 and early Q4 2022.

There has been a lot of speculation around EPC requirements for private rental sector (PRS) properties lately.

The Government’s Energy Efficiency Taskforce is charged with helping reduce energy consumption by 15% over the next seven years, cutting bills, and helping push down inflation.

As a lender, over the past 12 to 18 months, we have taken steps to transform our underwriting approach by putting new systems and processes in place which enable us to say yes to more cases as opposed to a “computer says no approach”.

For landlords, many have gone back to basics in terms of delving deeper into their yield, void and cost calculations. When it comes to yield, houses in multiple occupation (HMOs) have historically topped these charts and proved an attractive option for the more hands-on landlords.

The private rented sector is playing an increasingly vital role in the wider UK housing market but its value continues to come under scrutiny from different angles.

In our regular quarterly BTL barometer, the Landlord Panel reveal their rent increase intentions and other trends being experienced in the PRS and their intermediary market.

There is good news for mortgage advisers as a significant number of existing landlords – one-third – say they plan to remortgage over the next 12 months.

Are landlords planning to reject properties with poor EPCs? And what are their plans to cover the improvement costs? Our latest landlord panel reveals…

Costs are rising, and tenant demand holds strong – so where will landlords increase rents?

There’s no denying that landlords and their tenants are living in some challenging times. However, strong rental yields and diminishing void periods are contributing to profitability.

Around 40% of homes in the UK have an Energy Performance Certificate (EPC) rating of C or above already, but are your borrowers considering a Green mortgage when they remortgage or purchase?

How many current private rental sector (PRS) properties have an EPC rating of below C, are at threat of not being lettable after the 2025 or 2028 deadlines?

As portfolios professionalise, how many landlords plan to buy in an SPV/limited company this year? Our latest survey data revealed. 

We’ve steadily seen the massive impact climate change is having on our planet and what could happen if we ignore the warning of credible experts. The ‘Green’ issue is going to play a much bigger role in the mortgage and housing markets now.

Over two-thirds of landlords (68%) say they would now be less likely to purchase a property if it has an Energy Performance Certificate (EPC) rating of below C – the level at which anticipated legislation is likely to be introduced for all new and existing private rental sector tenancies from 2025 onwards.

Rental yields and tenant demand are holding firm for landlords’ property investments, however profitability of portfolios was slightly down on the previous quarter, according to the latest Q4 2022 BVA BDRC Landlord Panel research report.

According to the 2022 Simply Business SME Insights Report, half of small businesses are planning to increase their prices to help get them through the rest of the year.

With the fresh new year, many landlords will be planning their remortgage and purchase finance for this interesting year now coming over the horizon.

Advisers and borrowers still have the chance to work together in other ways. 

As we transition into 2023, we have made new improvements to make it easier to do business with us.  

UK homes remain the least energy efficient in Europe with the heating of homes representing 14% of our total carbon emissions

The PRS and the buy-to-let market is a hot topic because it provides housing to almost 4.5 million households in the UK, and the concern is how the supply of those homes holds up, and what it means for the housing gap if it doesn’t.

The property type that’s risen in popularity for high yield and low voids is the natural result of this economic landscape

The mortgage market has gone through many changes. Our latest research shows some fascinating results…

Buying this way is popular, but how many landlords are now taking the leap into remortgaging into a limited company too

For borrowers purchasing a house for the first time, the market fluctuations of the last month may have been concerning. However, if they are working with you, they already have the advantage.

A huge number of factors continue to weigh heavily in the thinking of both potential and existing landlords, no matter how large or small their expectations or portfolios.

Regulatory and tax changes have altered the way that many landlords approach individual property investments and how they structure their portfolios.

Maintaining any kind of barometer across the mortgage market over the past few weeks has been neigh on impossible due to the high levels of volatility and turbulence experienced across all sectors.

Landlords have always had to carefully assess any property investment and take a huge number of considerations into account to ensure it fits into their portfolio and be a profitable investment in its own right over the medium to longer term.

It's not only solar panels and heat pumps that get you over the level C. These low cost measures may be all your landlord needs.

Heightened awareness around Energy Performance Certificates (EPCs) has been evident across the BTL sector since the initial announcement of the government’s Improving Energy Performance Certificates action plan. 

The UK housing market has frequently proven its appeal and resilience in various ways. Inevitably, there are periods when it will come under greater scrutiny in terms of price, supply and activity.

A combination of factors impacting landlords, the private rental sector and the buy-to-let market have recently been influencing activity levels, specifically remortgage business.

As existing products mature, the question is – how might this impact future profitability and could this impending rate shock stop some smaller landlords from adding to their portfolios?

Rates have been increasing, but at what level do landlords say they would have to consider selling a property?

Dynamics across the rental sector have always been fluid, and the requirements of a variety of rental properties continue to evolve in terms of length of tenancy, space, property type and location, especially with the emergence of a new remote working culture. A lack of supply and heightened demand is also combining to drive rental prices higher.

Rental yield is one of the most important considerations for landlords and calculating this represents one of the simplest equations. However, more than 1 in 4 landlords (28%) don’t know their rental yield or are unsure how to calculate it.

It’s no secret that regulatory shifts and tax changes have impacted BTL margins in more recent times and that a strong proportion of landlords – especially those at the more professional end of the spectrum – are carefully evaluating a range of options to help reduce tax burdens, increase yield and manage their outgoings.

The data also revealed that 9 in 10 landlords are aware of the new EPC ‘C’ legislation. So what expert advice can you offer to landlords about the green mortgages available to them?

A common misconception among the self-employed is that applying for a mortgage is difficult, and therefore, so is getting onto the property ladder.  However, in truth, the specialist mortgage market has evolved significantly to make it easier for those with irregular or complex income to secure a mortgage.

Sustainability has become an essential goal for many different businesses over the last few years, where sectors would look at how environmentally conscious they are being. One of the main sectors that’s seeking out to include sustainability and tackle climate change is the housing market.

Few in our sector will have failed to notice the government’s recent proposals which focus on the mortgage and housing markets.

According to our most recent research, carried out in March 2022 in partnership with BVA BDRC, an all-time-high proportion of landlords, 62%, are reporting that tenant demand has grown, as cities recover from the Pandemic lockdowns. 

Every quarter, we work with BVA BDRC to survey around 700 landlords about their  portfolios. For the first quarter of 2022, here’s what they told us.

From 2025, under the current proposals all newly rented properties will be required to have an EPC rating of C or above. Currently, properties only require an EPC rating of ‘E’ or above for us to lend at Foundation Home Loans. Existing tenancies will have until 2028 to comply with the new rule changes.

One of the biggest questions landlords have been asking themselves in recent times is, to incorporate or not to incorporate. As ever, the answer lies within the circumstances of each and every landlord and their portfolios.

The long-term stability and resilience shown by the UK housing market over the years continues to attract strong interest amongst a range of borrowers...

Our latest BVA BDRC Landlord Panel research for Q4 2021 discovered that around 4 in 10 rental properties currently have an EPC rating of ‘D’ or lower.

What’s the difference between a limited company portfolio landlord, compared to a portfolio held by an individual or group of individuals?

Covid-19 has changed the financial landscape for businesses and individuals across the country.

We believe that the move to improve carbon emissions in the property sector remains critical in 2021. Here are 6 reasons to speak to us about a green mortgage for your landlord clients in 2021. 

As our lives continue to adapt, we lenders are constantly listening and evolving how best to interact with our adviser partners and their clients/our customers.