The Intermediary – September 2025 - Flipbook - Page 29
BUY-TO-LET
In focus
Stagnation,
redemption
or evolution
T
he buy-to-let (BTL)
sector has been
through a rollercoaster
few years, but I feel
confident enough to
say that we may be
entering a phase of greater stability.
For this to not evaporate in an instant,
there must be industry-wide support
and collaboration.
Conversations I’ve had across
the intermediary market have
been remarkably positive and
general activity seems to be on an
upwards trajectory. This is perhaps
unsurprising, given the interest rate
cuts made by the Bank of England
reducing the cost of borrowing and
benefiing many homeowners.
This has sparked increased
competition among lenders, with
the majority of the top 10 offering a
headline residential fixed-rate deal
below 4%. Data from Twenty7tec
found that mortgage searches jumped
4.4% on the day of the recent base
rate cut, compared to the average the
week before.
This feeling of optimism isn’t
isolated to one segment of the market,
and has undoubtedly permeated into
the BTL sector, demonstrated by a
lending surge in the first quarter of
the year, with 58,347 new loans worth
£10.5bn up 38.6% by volume and
46.8% by value year-on-year, marking
a possible end to the so-called ‘big
landlord sell-off ’.
This feeling of optimism among
brokers is starting to spread among
landlords as well, driven by improved
yields, lower interest rates, and
rising rental income. BTL mortgage
rates have also become much more
competitive and in some cases even
cheaper than residential deals.
In short, the outlook for landlords
is looking increasingly positive, and
CHARLES MORLEY
is director of mortgage
distribution at Metro Bank
there’s no reason to suspect this won’t
continue, as long as the economic
conditions remain and the right
support is given.
Complex strategies
Buy-to-Let strategies for landlords are
also becoming more sophisticated.
Over the past five years, we have seen
growing interest in limited company
BTL. Research from Hamptons found
that, in 2024, a record 61,517 new
limited companies were established
for buy-to-let purposes, marking a
23% increase on the previous year.
The number of companies holding
BTL properties across the UK passed
the 400,000 level in February for the
first time. This growing trend among
landlords to incorporate could suggest
that tax efficiency is becoming a
growing priority for many,
In response to this shi, lenders
have also evolved, offering greater
flexibility on ownership structures,
more competitive rates, and
streamlined underwriting.
The human touch remains critical
in navigating complexity in what is
becoming a competitive BTL lending
environment. At Metro Bank, we’re
seeing real demand for buy-to-let
products, and we’re expanding our
offering to support private landlords,
recently entering the house in
multiple occupation (HMO) and
multi-unit freehold block (MUFB)
sectors, where we see potential
for growth.
Strong decision-making
Advisers and accountants each play a
unique role in helping landlords make
informed and financially sustainable
decisions. A joined-up approach
should start at the first conversation.
Advisers should encourage their
customers to engage an accountant
early – particularly when
incorporation is being considered. Tax
implications like Capital Gains Tax
and dividend taxation, among other
elements, are critical to understanding
the full picture.
While limited company BTL cases
can be complex, that doesn’t mean
they have to be confusing. Brokers
can add real value by breaking down
ownership structures, financials and
borrowing plans into clear, lenderfriendly narratives.
Collaborating with lenders can
oen be central to success, so my
advice would be to prioritise building
those lender relationships. Having
a good BDM contact, particularly
at a specialist BTL lender which has
flexible criteria, allows brokers to
discuss cases early and avoid surprises.
The HMO and MUFB market is
expected to continue to grow over the
next five years due to yield output,
especially with the introduction of
tech platforms simplifying special
purpose vehicle (SPV) set-up and
lending processes.
Brokers who upskill in this space,
and who understand portfolio
structuring and layering solutions,
will unlock long-term and oen very
loyal relationships.
The journey ahead won’t be without
challenge. Close collaboration between
lenders, mortgage intermediaries, the
regulator and the Government will
be needed to ensure the important
role of the private rental sector within
the UK housing market continues to
be recognised. ●
September 2025 | The Intermediary
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