We are now almost through the first month of the year, and each passing day, gives us a greater understanding of what the rest of 2023 might deliver.

Of course, it’s still very early, but have we had the ‘big bang’ start that many were predicting?

Certainly not in the early weeks of the month, but as we have progressed through January it’s been possible to witness a growing momentum and an increase in product numbers and changes, as lenders have sought to generate early volume.

This is perhaps more apparent in the residential space, where day by day we appear to be seeing lenders jump over themselves in terms of pricing, but also to a lesser extent in the buy-to-let sector.

Certainly, all the product updates I have seen – including those from ourselves – have been focused on price cuts. We were able to drop our five- and seven-year fixes by 20 basis points this month, and we are keeping a close eye on the markets and our peer group, and are likely to be adjusting accordingly in the weeks to come.

There is a certain degree of uncertainty about buy-to-let activity in 2023. Last year, according to the predicted lending figures, we had a very strong 12-month period, even with the turmoil generated by the ‘Mini Budget’.

After that period, it is not surprising, forecasts are more circumspect, particularly in terms of purchase activity, although remortgage business is anticipated to hold up well, and from the early parts of the year, we would certainly concur with that.

There’s no doubting that invested landlords, with medium to large portfolios especially, want to add further properties but, as I’ve said numerous times, the maths has to work. Especially in an environment where mortgage costs have gone up, and where the costs associated with letting out a property to the PRS have also gone north.

That said, the fundamentals remain very sound. For example, I’m not sure anyone is predicting a drop in tenant demand through 2023. Far from it. And coupled with a lack of supply that is driving rental yield levels, albeit landlords have to factor in the cost of living increases we have seen, and the rents that tenants can genuinely afford.

Rental yield is undoubtedly important though, and we’ve seen for some time that landlords are willing to diversify in terms of both property type and the regions they purchase properties in, so they can maximise the yield and maintain a profitability that will keep them invested.

Thus, we have witnessed growing interest in HMO and multi-unit blocks because these tend to give greater yields, and landlords have looked beyond the regions they themselves live in (or traditionally purchase in), to access properties which may be cheaper and may also deliver a better yield.

Hence, while I wouldn’t say there has been a mass migration north, it is these regions – the North West, North East, Yorkshire & Humberside – which have tended to top the rental yield charts in the past couple of years, and therefore their attraction to ‘outside’ investors has grown.

Our most recent iteration of our Rental Barometer shows these three regions leading the way again, although – and this is a welcome move – the vast majority of regions where Fleet lends also showed both an annual and quarterly increase in yield, and this should give greater confidence to all landlords, particularly if they do plan to purchase throughout 2023.

What we can say is that landlords are not so constrained in terms of the properties they want to buy and the regions they want to buy in. If you’re an adviser, don’t be surprised if a client of yours wants to arrange finance to purchase many miles away from where they live.

Advisers who can grasp the fundamentals of the mortgage market and the regional picture across the country, are likely to do well here, because it’s also obvious that there is much more for landlords to take into account when they are looking beyond their own borders. Plus, of course, the mortgage market is so fluid right now, that it barely makes sense to even look at arranging your own finance direct, when you could use an adviser to give you access to the whole market.

In that sense, demand for advisers will increase and the share of the mortgage market you account for will grow. It’s therefore all about providing an excellent service, finding the right solution, and continuing to be front and centre of your landlord clients’ minds at all times.

If you can make this happen, then I suspect 2023 will be a very good year for you and the landlord borrowers you service.

Steve Cox is chief commercial officer at Fleet Mortgages