The Intermediary – December 2025 - Flipbook - Page 24
BUY-TO-LET
Opinion
Inside the trends
shaping buy-to-let
in 2026
T
he buy-to-let (BTL)
market has weathered
its share of storms over
recent years. From tax
changes to mortgage
rate volatility and
regulatory shis, at times it has felt
like landlords have had to stay nimble
to keep their heads above water.
But the future looks brighter, with
2026 set to see a predicted 11% rise
in lending. There is more appetite,
and two areas to keep an eye on are
international investors coveting UK
property and a surge in remortgage
activity. Here is what the next 12
months could look like in the market.
International investors
Since 2016, the share of newly
incorporated buy-to-let companies
with at least one non-UK shareholder
has grown from 13% to 20%. What has
changed recently is the momentum,
with exchange rates seling and the
UK’s reputation for stable property
laws and transparent markets pulling
in capital.
The North East is proving to be
particularly appealing, with average
yields of 9.3% compared to London’s
5.7%. Regional cities like Manchester
and Birmingham are also drawing
aention, as many areas offer stronger
yields and more accessible entry
points than the capital.
Some lenders are evolving their
lending criteria, too. Rather than
blanket refusals based on overseas
addresses, there is more nuance now,
with lenders looking at the strength of
an applicant’s UK ties and the quality
of the asset, alongside deposit size.
International buyers aren’t just
looking for flexible lending. Many are
structuring their purchases through
limited companies, which now
account for an estimated 70% to 75%
22
The Intermediary | December 2025
MARTIN SIMS
is distribution director at Molo
of buy-to-let acquisitions, according to
estate agent Hamptons.
It is a shi already feeding through
to cases we see at Molo, where
international buyers are using higher
loan-to-value (LTV) products and
flexible affordability to move more
quickly on opportunities.
The remortgage wave
If international investment is one
story for 2026, remortgaging looks
like it might be the other. There looks
to be a continuation of maturing fixedrate deals that will drive continued
growth in remortgaging throughout
2026. Many landlords who locked into
low rates back in 2021 will come off
those deals within the next 12 months.
The timing could work in their
favour, as mortgage rates are expected
to keep falling through to the end
of 2026. HSBC underlines this by
predicting the base rate could drop to
3% by the end of 2026.
While rates are still higher than the
sub-2% deals landlords enjoyed a few
years back, they are a far cry from
the 6% to 7% peaks we saw in 2023.
Most importantly, lenders are being
competitive.
What stands out for landlords right
now is the opening it creates. With
gross rental yields now averaging 7.1%
across England and Wales, many will
use remortgaging to raise capital for
portfolio expansion, something we
are seeing at Molo as landlords look to
reposition ahead of lower rates.
Tax changes
Making Tax Digital for Income Tax
comes into effect in April 2026,
adding a new dynamic for investors.
Landlords with property income
over £50,000 will need to keep digital
records and file quarterly updates
with HMRC, rather than the current
annual return. Those earning
between £30,000 and £50,000 follow
in April 2027. It’s not a seismic shi,
but it does mean more admin and
tighter deadlines.
The 2026 playbook
The buy-to-let market in 2026 won’t
be a one-size-fits-all approach.
International investors need lenders
that understand cross-border
applications. Remortgaging landlords
increasingly want products that work
across a range of properties.
First-time landlords entering the
market require different underwriting
than seasoned portfolio holders. The
complexity is not going away, and if
anything, it is intensifying.
Lenders geared towards these
specialist cases are well equipped to
serve increased activity. Products
covering non-UK residents, houses
in multiple occupation (HMOs),
multi-unit blocks (MUBs) and newbuilds align with where investment
is flowing.
With gross yields averaging 7.1%,
landlords can afford slightly higher
rates if it means accessing the right
property type or structure.
Molo has built an offering around
the complexity that defines today’s
buy-to-let market. From firsttime landlords to international
investors, HMOs to limited company
applications, our products are
designed to meet the varied needs
brokers are seeing.
With rates starting from 2.54%,
we are positioned to support the
opportunities 2026 is set to bring. ●
