The Intermediary – October 2025 - Flipbook - Page 37
BUY-TO-LET
Opinion
to-value (LTV) on all BTL mortgages,
with a reduction of our interest
coverage ratio (ICR) on limited
company landlords up to 125%.
In addition, and for all BTL streams,
we do not stress-test the background
portfolio or have a minimum income
requirement when remortgaging.
Having an in-depth knowledge and
understanding of the needs of expats
also led us to specialise in expat BTL
mortgages, including HMOs, for those
living and working in more than 40
countries around the world.
EPC ratings
Clearly, there is a need for longterm planning and future proofing
portfolios by upgrading Energy
Peformance Certificate (EPC) ratings.
Of course we hear of landlords
selling off those less rentable
properties with Bands D and E ratings.
Some find that the cost effectiveness
of improving D and E EPC ratings to C
and higher is just not worth it.
Diversification
For landlords looking for a simple
way to boost short-term income,
other forms of investment have been
providing good above inflation yields.
These include easy access interest
paying deposit accounts and fixed
interest gilts and bonds. Landlords are
finding that it is an effective way to get
a solid return on their surplus monies.
Also, liquidity is vital to the
landlord hit with increased costs or an
unexpected one-off liability – a tax or
legal bill for example. And of course,
it is very handy to have spare cash
to reduce the LTV on new buy-to-let
property purchases.
New entrants
Investing in BTL property is much
more complex for newcomers today
than it was historically. Back in the
day, when you only needed a 25%
deposit, you could buy the property
personally and in your own name,
Stamp Duty was standard, and all
the mortgage costs could be offset.
You could quickly work out where
you stood and if a property would be
rented out profitably.
Now, in many cases and depending
on one’s personal tax situation,
an aractive investment might be
unviable, and incorporation makes
perfect sense.
Although it is a simple thing to say
“just buy it in a limited company,”
in practice you will need decent
quality professional advice not only
from a broker, but also tax and legal
specialists. The fees will be steep,
perhaps, but at least you are less likely
to fall foul of the HMRC.
There is no doubt that the BTL
market has become more professional,
and new entrants need to be a lot
more business-minded about it.
A commied successful landlord
requires patience and long-term
planning. The rewards are there, as is
the satisfaction of making a significant
contribution to providing decent
homes for those who desperately
need them.
There is also no doubt that mutual
lenders specialising in BTL – and other
niche markets – are very well placed to
not only continue to serve this critical
area of the market, but help it thrive
in these uncertain times. ●
October 2025 | The Intermediary
35
