The Intermediary – July 2026 - Flipbook - Page 60
SPECIALIST FINANCE
Opinion
ADVERSE
CREDIT
TO ADDED
CONTEXT:
The expanding role of
underwriting judgement
he UK landlord market
has demonstrated
remarkable resilience
over the past few years.
Higher interest
rates, inflationary
pressures, regulatory reform and a
more challenging economic backdrop
have all tested the sector. Yet despite
these headwinds, most professional
landlords have adapted.
Rental demand remains strong,
yields have improved in many parts
of the market and investors continue
to identify opportunities to grow
and diversify their portfolios. That
resilience is encouraging, but it would
be wrong to assume the market is
unchanged.
As the market moves through
a slower and more disciplined
phase of the cycle, lenders and
brokers are increasingly focused
on understanding individual
borrower circumstances rather
than relying on broad assumptions.
In many respects, this reflects the
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The Intermediary | July 2026
ongoing professionalisation of the
landlord market.
Today’s portfolio landlords are oen
operating through limited company
structures, managing multiple special
purpose vehicles and investing across
different property types.
Many have expanded beyond
traditional buy-to-let into semicommercial, commercial and mixeduse assets in response to changing
regulation, taxation changes and the
search for stronger long-term returns.
As a result, landlord businesses
are becoming more sophisticated.
At the same time, assessing them is
becoming more complex.
Impact of higher rates
The effects of sharp interest rate
increases seen during 2023 and 2024
are still being felt.
Many landlords who secured
borrowing during the ultra-low-rate
environment have spent the past two
years refinancing on to significantly
higher rates.
DAVID KENNEDY
is chief operating officer
at Redwood Bank
In some cases, borrowers who
were comfortably servicing debt at
historically low fixed rates have had to
adapt quickly to a very different cost
environment.
Many of the challenges emerging
today can be traced back to borrowers
refinancing from historically low
fixed rates secured before 2022 on to
significantly higher borrowing costs.
