The thing I’ve always enjoyed most about working in the specialist mortgage market is the people.
I’m lucky that a big part of my job is getting out and about, travelling to events, networking sessions and meetings. It means I get to speak directly to brokers and other lenders. There’s rarely a quiet period, and the past month or so has been particularly busy as I’ve been on the road traversing the length and breadth of the country.
From London to Newcastle, the conversations I’ve had have been lively, insightful and, most importantly, grounded in the day-to-day reality brokers are dealing with across the buy-to-let market right now.
While it’s true that every region will always have its own nuances, there are also some clear themes emerging. So, here are five takeaways from my recent travels that I think we all should be paying close attention to.
1. Affordability pressure is still very real
In Basildon last month, a number of advisers spoke about the growing tension between rents and affordability requirements. In certain areas, rental levels simply aren’t keeping pace with the interest coverage ratios (ICRs) required for buy-to-let lending.
This isn’t necessarily about a lack of tenant demand: quite the opposite in many cases. But when rents remain relatively modest compared with property values or borrowing costs, it can create a challenge for landlords trying to meet ICR thresholds.
Another issue repeatedly raised was rising service charges on flats. In some cases, these are increasing at a rate that materially impacts affordability calculations, and, for brokers, this adds another layer of complexity when structuring deals.
Amidst these challenges, advisers said they were noticing that the limited company ownership model is becoming ever-more popular. Many landlords are increasingly comfortable operating through corporate structures, not least because certain costs, including fees, can be treated as deductible expenses. It’s clear this trend is not only firmly embedded now but is still gathering momentum.
2. Portfolio landlords are thinking strategically about yield
When I moved on to London, brokers there spoke about landlords becoming increasingly strategic in how they deploy capital across their portfolios.
A common theme was raising capital against existing buy-to-let assets in order to fund new purchases elsewhere. Interestingly, many of those purchases are not in London at all, but in northern cities where yields are more attractive.
This reflects a broader shift we’ve been seeing for some time, with experienced investors thinking nationally rather than locally. Technology and professional management have made it much easier to operate portfolios across multiple regions, and many landlords are comfortable doing exactly that.
3. The buy, renovate, refinance model is thriving
Newcastle provided a fascinating insight into the continuing popularity of the buy, renovate, refinance strategy.
Several advisers described investors targeting lower-value housing stock, carrying out relatively straightforward upgrades, often replacing kitchens, bathrooms or carrying out cosmetic improvements, and then refinancing the property within a matter of months.
What stood out most was the consistency of the feedback. Multiple brokers independently described the uplift in yield after refurbishment as ‘exceptional’.
The traditional ‘flip’ model seemed to be on the wane as house prices and material costs rose at pace, but with greater stability in the market, its popularity is evidently returning in some parts of the buy-to-let market.
For lenders, this is a reminder that investors are incredibly resourceful when it comes to identifying opportunities. The buy-to-let market has always rewarded those willing to add value to properties, and that entrepreneurial mindset remains very much alive.
4. Specialist segments are gaining momentum
Another interesting discussion took place in Haydock where advisers highlighted growing investor demand for serviced accommodation units, particularly off-plan one- and two-bedroom apartments.
These developments are often positioned to serve business travellers who need flexible accommodation close to city centres but don’t necessarily want to stay in traditional hotels.
This is creating what many brokers now see as a specialist segment within the broader buy-to-let market. While it may not suit every investor, the advisers I spoke to were clear that momentum in this space is building.
It’s a good example of how the sector continues to evolve, with landlords exploring new ways to meet changing demand.
5. Government initiatives can quickly stimulate activity
Finally, my visit to Cardiff highlighted how policy changes can have a direct impact on investor behaviour. Or, perhaps more pertinently, the speed at which a government decision influences activity in the buy-to-let space.
For instance, the Welsh Government has introduced Leasing Scheme Wales, an initiative which allows investors to purchase properties and rent them back to the council for periods ranging from five to 20 years. Once contracts are signed, landlords can reclaim the higher rate of Stamp Duty normally applied to second homes or buy-to-let purchases.
The advisers I met were clear that this has already stimulated activity in the local market. For investors, the model offers a combination of security and clarity around long-term occupancy, while also helping address housing supply challenges.
It’s a good reminder that policy interventions, when designed well, can unlock fresh opportunities for both landlords and communities.
LISTENING TO THE MARKET
As ever, a common theme that shone through for me throughout these meetings and events was the resilience and adaptability of the buy-to-let sector. This is almost always the case: it’s why I take negative predictions and speculation with a large pinch of salt. Instead, I favour a more measured and pragmatic mindset whenever challenges arise for landlords, lenders or brokers.
It was clear to me that landlords are continuing to seek out opportunities, whether that’s exploring new regions, embracing refurbishment strategies or investing in emerging specialist segments. Yes, some landlords will downsize portfolios, while others may choose to exit the buy-to-let market all together. But new investors are entering the space and others are expanding their portfolios.
For brokers, however, it’s apparent that they’re working harder than ever to structure deals that work within the parameters of today’s lending environment. And as lenders, the key takeaway is that flexibility, speed and a willingness to understand complex cases will remain critical.
Spending time with brokers around the country always reinforces the same point for me: that the best insights into our market rarely come from spreadsheets or reports. They come from conversations. And right now, those conversations suggest a sector that’s evolving, adjusting and continuing to find ways to move forward.
