The Intermediary – August 2026 - Flipbook - Page 35
BUY-TO-LET
Opinion
academic year. However, because
landlords wishing to rely on Ground
4A cannot sign tenancy agreements
more than six months before the
tenancy begins, many are now
reconsidering that approach.
Some landlords are expected to delay
marketing altogether, while others
may continue advertising properties
but postpone signing tenancy
agreements until they fall within the
permied timeframe.
Neither approach is entirely
straightforward. Delaying marketing
reduces certainty for landlords,
while identifying tenants without
immediately entering into tenancy
agreements creates practical
complications around reservation
periods and holding deposits.
This means advisers may
increasingly find landlord clients
making decisions later in the leing
cycle than they have previously, with
mortgage applications, refinancing
take-up and investment purchases all
potentially moving to different points
in the year.
Part of a wider trend
Of course, none of these changes is
happening in isolation.
Over recent years, landlords have
already adapted to tax reforms, higher
borrowing costs and an increasing
amount of regulation affecting
different parts of the private rented
sector (PRS).
The additional flexibility now
being exercised by student tenants
represents another important
adjustment that landlords need to
factor into their long-term planning.
For some investors, this may
reinforce the appeal of more
traditional buy-to-let (BTL) properties
let to working professionals.
While they may not always deliver
the highest headline yields, they
can potentially offer simpler
management, longer average tenancy
lengths and more predictable rental
income throughout the year.
That does not mean student
accommodation becomes a less
aractive investment, but landlords
will increasingly need to weigh higher
potential returns against greater
income variability.
Reconsider strategy
These developments are already
prompting landlords to reassess how
they want their portfolios to evolve.
Some may continue to specialise in
student accommodation but build
different assumptions into their
business planning, recognising higher
headline yields may now need to
offset longer anticipated void periods.
Others may decide that professional
tenants offer a more stable long-term
proposition.
Neither approach is inherently right
or wrong, because every portfolio
has different objectives, but these
conversations are becoming much
more relevant than they were even six
months ago.
Where advisers fit in
One of the consistent themes across
the BTL market is that landlords are
increasingly making decisions within
a much more complex operating
environment.
Tax, regulation, tenant behaviour,
finance costs and local market
conditions all interact, meaning
investment decisions require a broader
assessment than simply comparing
mortgage rates.
Advisers should also be
encouraging landlord borrowers to
revisit their cashflow assumptions
when refinancing or purchasing
student property.
Where summer voids become more
common, landlords may wish to
retain larger cash reserves or consider
how product choice, fixed-rate periods
and remortgage timings fit alongside
changing income paerns. Those
conversations are likely to become just
as important as discussing the interest
rate itself.
Understanding how legislative
changes affect rental income,
cashflow, refinancing requirements
and future investment plans enables
advisers to provide guidance that goes
well beyond product selection.
In many cases, conversations
that begin with a mortgage review
may naturally develop into wider
discussions around portfolio strategy,
tenant mix and long-term investment
objectives. The student leings
sector is unlikely to lose its araction
overnight, particularly given the
continued strength of demand in
many university locations.
However, the way those investments
operate is changing, and landlords
who recognise that early, alongside
advisers who help them adapt, are
likely to be best placed to make
informed decisions as the market
continues to evolve. ●
