The Intermediary – September 2025 - Flipbook - Page 39
BUY-TO-LET
In focus
Shockwaves fade
as landlords get
set to expand
T
here is always some
who have a pessimistic
view of the buy-to-let
(BTL) market, ready to
bemoan its challenges
– despite the fact it
has continued to bounce back from
adversity. While the obstacles are
well documented, latest data from
UK Finance shows that opportunities
still exist and ambitious landlords
continue to seize them.
In its recent buy-to-let market
update, UK Finance revealed that
in Q1 2025, the market saw a 38%
increase in loans by quantity, and a
46% increase by value compared to Q1
2024. Alongside an increase in average
rental yields, positive movement by
lenders saw average interest rates
drop by 10bps on the previous quarter.
Average interest coverage ratios (ICRs)
are up on last year too, pointing
towards greater breathing space when
stress testing.
It certainly mirrors what we
are seeing at Landbay, with strong
levels of new applications, as well
as increasing take up of our product
transfer options for those looking
to refinance efficiently. Some of the
affordability pressures of the past few
years are beginning to ease, as rates
and conditions improve and lenders
innovate in their products and criteria.
We are seeing less need among
landlords to buy down their interest
rate with higher product fee options.
While they proved valuable for
brokers to help increase the borrowing
potential of their clients and remain
part of our range, we are moving away
from 6% or 7% as the preferred choice,
to where 2% is the fee of choice.
All this is hugely positive for the
BTL market, the private rented
sector (PRS) and the housing market,
which is heavily reliant on landlords
providing great quality rental
accommodation. Best of all, it’s all
following the surprise jump in Stamp
Duty announced in last year’s Autumn
Budget – a move that was supposedly
the death knell for BTL.
This couldn’t be further from the
truth. According our latest survey,
52% of landlords intend to buy
properties in the coming 12 months.
This is a big jump from just 27% in the
previous survey, which took place days
aer the Autumn Budget. Now nearly
two-thirds of those planning to buy
say that they will just factor the tax
increase into their negotiations. We
also see the trend of those exploring
properties further afield, in the likes
of the Midlands or the North.
Perhaps anticipating what is to come
when the Government eventually
stops kicking the can, more than half
of landlords plan to buy properties
that require lile modification to meet
future Energy Performance Certificate
(EPC) deadlines.
Horizon scanning
It’s a good example of one of the
obstacles that landlords could face
in the coming 12 months or more
– alongside the implementation of
the Renters’ Rights Bill, which still
looks set to change the way landlords
operate their properties.
On top of that, we are hearing of
another potential tax raid by the
Chancellor. This time, she could target
landlords again by imposing National
Insurance (NI) on rental income
– which could actually put more
pressure on lower rate taxpayers and
impact amateur landlords.
If true, could this further expedite
the professionalisation of the sector
and the growing movement towards
limited company or special purpose
vehicle (SPV) structures?
ROB STANTON
is sales and distribution
director at Landbay
Nevertheless, the encouraging thing
is that landlords remain commied
to the PRS. In our most recent survey,
nearly 60% of landlords told us that
they had no intention to sell any of
their properties in the next 12 months.
Once again, this is a clear jump from
the previous survey in the wake of the
Autumn Budget, and shows how far
confidence has rebounded.
Of course, this isn’t the full story
– some are looking to dispose of
properties, either as a natural part
of developing a successful portfolio
or because they do intend to scale
back. The sector has a role to play
in supporting these landlords and
giving them the confidence to not
just to carry on, but to expand and
succeed. We aim to play our part by
giving our broker partners the tools
and competitive rates to facilitate this,
whether it’s those set to refinance or
landlords looking to scale.
Perhaps it is that ‘bouncebackability’
and sheer resilience shown by
landlords and the sector that has
made it a target of the Chancellor and
subsequent Governments – along with
the continued anti-landlord rhetoric
we hear and read in the mainstream
media that undermines the hard
work, dedication and significant
investment of landlords.
For politicians, it’s a case of ‘abuse
this at your peril’. We don’t want it
to be that the vital role that landlords
and rented accommodation plays
in the UK’s housing mix is finally
appreciated when it’s too late. For
now, the signs and the data are good,
and the sector remains commied to
supporting landlords and the brokers
that work so closely with them. ●
September 2025 | The Intermediary
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