It’s been a painful year for landlords, but there’s a light at the end of the tunnel
It’s been a pretty rough year for landlords across the UK. From higher interest rates to tax changes and even regulatory reforms such as the Renters' Rights Act, buy-to-let landlords have been feeling the pinch.
But they’re not ready to give up just yet.
New research from property lender Together found that 76% of landlords are likely to refinance their existing property portfolios over the next 12 months to fund further investment - meaning the appetite is still there.
The survey of over 1,000 landlords across the UK found 36% are highly likely to refinance their portfolio over the next year, while a further 40% said they were somewhat likely - and just 12% said they were unlikely to do so. The remainder were neutral on the issue.
Speaking to Mortgage Introducer, Dan Narwal, Intermediary Corporate Account Director at Together, explained that this survey is a great snapshot into how the market looks right now, adding that shift towards refinancing multiple properties under one lender is indicative of overall sector confidence.
Portfolios as a single asset
“This shift is being driven by landlords looking for efficiency, [the ability to] manage costs better and revisiting their future growth ambitions,” he said. “As we know, over the past few years, landlords have been building portfolios, they’ve chosen the best lender at the time, and that leads to different payment dates or different maturity dates. All of these external factors make it complex for landlords to manage their portfolio.
“Today, it’s about being more strategic with their cash flow, making sure they're getting the most out of their portfolio and saving themselves time. [As such] a lot of landlords are looking at their portfolios as one single asset rather than individual properties dotted around the country.”
The challenging scenario buy-to-let landlords have found themselves in recently, including juggling regulatory reforms, have driven many to rethink their portfolio positioning. At Together, they’ve been quick to respond to this new pattern in the market.
“With 76% of landlords saying that they plan to refinance their portfolio over the next 12 months to fund further investment, this showed to us that there was a market to support these landlords - and that professional landlords were keen to continue investing,” added Narwal.
“[At Together], our new product tries to simplify that borrowing process for them. It gives them one monthly payment and one maturity date, which obviously includes one personal guarantee. [We want to] simplify the process whilst trying to allow them to navigate all the recent changes.”
These simplifications allow landlords to consolidate all properties under one listing - which is ideal for career landlords with diverse portfolios. As Narwal told Mortgage Introducer, this type of landlord often own standard residential assets alongside HMOs, freehold blocks and semi-commercial assets, meaning having a lender that can access everything holistically in one place is key.
‘We’re confident that we can support them on that journey’
“Having that one affordability assessment effectively removes the duplication because there’s just one payment,” Narwal added. “This makes cash flow a lot more manageable for landlords.”
And, looking ahead to what the market holds for buy-to-let-landlords in the near future, Narwal believes Together’s new offering is a sign of the times.
“Ultimately, we believe that portfolio growth is a big area,” he added. “Landlord confidence in the market remains strong and landlords themselves are positive. They've had a challenging few years but they're still looking to invest - they’re still looking to grow and they're still finding opportunities in in the market.
“Our message is that if a landlord wants a lender, we’re confident that we can support them on that journey. We see the new proposition as a partnership with landlords. Because at Together, we’re very relationship driven. We’re all about supporting landlords through the next stage of the evolution of the buy-to-let market.”
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This article was created in partnership with Together.
