The Intermediary – December 2025 - Flipbook - Page 25
BUY-TO-LET
Opinion
Landlord sentiment
has taken a knock,
but it’s not terminal
Y
ou don’t have to look
far to find gloomy
headlines about
landlords exiting and
regulation piling up.
And yes, the bar has
been raised. But ‘harder’ is not the
same as ‘hopeless’.
What’s unsettling clients
In a recent National Residential
Landlords Association (NRLA) survey,
landlords highlighted:
Policy uncertainty: The Renters’
Rights Bill was the single biggest
hit to confidence, with 24% of
respondents said they are preparing
to exit, and a further 24% waiting to
see the final shape before acting.
Admin load: Making Tax Digital
arrives for landlords with rental
income above £50,000 from April
2026 (extending to £20,000 in 2028),
introducing quarterly reporting and
new soware costs, a real planning
issue for smaller investors.
Tax and running costs: Section 24
continues to bite, with more than
half (54%) of landlords likely to sell
more properties over the next five
years if relief restrictions remain.
Energy efficiency is another
driver, as about 49% hold at least
some stock at Energy Performance
Certificate (EPC) D or below, forcing
capex decisions.
The introduction of a National
Insurance charge on rental profits
adds to the fog of planning.
But the participation and profit
picture is more resilient than the
headlines might suggest:
Profitability remains the norm:
Paragon Bank research shows 87%
of landlords reported a profit in Q2,
up from 84% in Q1, underpinned by
resilient demand and yields.
Investors are still buying, just
differently: Hamptons found that
investors purchased 11.3% of homes
in Q3 2025, essentially flat year-onyear despite the second home SDLT
surcharge rising to 5% in April. The
mix has tilted North to lower entry
costs and stronger gross yields.
A new cohort is entering:
Hamptons found that Millennials
now make up around half of new
shareholders in BTL companies in
England and Wales. That’s fertile
ground for first-time portfolio
advice and SPV education.
Rents look supported near term:
September’s Royal Institution of
Chartered Surveyors (RICS) UK
Residential Market Survey reports
landlord instructions falling (net
balance 38%, the weakest since mid
2020), while a net balance of +23%
of surveyors expect rents to rise over
the next three months and around
3% growth is anticipated over 12
months at a UK wide level. Tight
supply plus steady demand is still
supporting revenues.
Headwinds to conversations
1. Build a business case for every
purchase and refinance: Stresstest at realistic reversionary rates,
not best case initial rates. Budget
for maintenance, compliance and
a ring-fenced EPC pot. Margin for
error is a strategy, not a luxury.
2. Lean into geography, not habit: If
a client’s ‘home patch’ doesn’t stack
up under today’s ICR hurdles, model
alternatives where it does. This is
where your sourcing plus local agent
intel can change a client’s outcome.
3. Choose the right ownership
structure: Many growth-minded
landlords now use SPV limited
companies to manage tax and
lending flexibility. It isn’t one-
HITEN GANATRA
is managing director
at Visionary Finance
size-fits-all, so always signpost
independent tax advice, but for
scaling portfolios it can simplify
borrowing and management.
4. Optimise the finance, don’t just
secure it: With lenders active across
5-year fixes, trackers and hybrid
options, model the total cost of
debt. Where the numbers justify,
refinancing or using bridging to
release capital can beat funding
capex from cashflow, shortening the
upgrade timetable and protecting
rental competitiveness. Also, the
competition between lenders is
fierce, so use that to your advantage.
5. Take a ‘steady, not spiky’
approach to rents: RICS’ nearterm rent outlook supports
measured increases at renewal,
balancing yield with occupancy
and minimising voids. Help clients
forecast the rent roll realistically
rather than overstretching.
6.Prepare clients for process
changes early: Encourage clients
to organise digital records now, pick
compliant soware, and diarise
quarterly tasks.
Strip away the noise and you’re
le with a sector that rewards
competence. The ‘accidental’ approach
is over. In its place: evidence-led
acquisitions, disciplined cashflow
management and a clear plan for
compliance and upgrades.
That’s how, even in a tighter regime,
nearly nine in 10 landlords are still in
profit and why brokers who lean into
modelling, structure and strategy will
continue to unlock viable transactions
for clients.
Buy-to-let in 2025 is more regulated,
more process heavy and less forgiving
of sloppy maths, but it is not dead. ●
December 2025 | The Intermediary
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