The Intermediary – October 2026 - Flipbook - Page 35
BUY-TO-LET
Opinion
ALEX UPTON
is managing director, specialist
mortgages and bridging finance
at Hampshire Trust Bank
influence how well an investment
performs. Even where rental income
is increasing, landlords need to
consider what is le aer those costs
and whether the property still delivers
the return they need.
Strong tenant demand creates
opportunities for investors, but
demand alone is not enough to ensure
an individual property will pay its
own way. The numbers still need to
stack up, both at the point of purchase
and over the longer term.
This is why I think we need to be
careful about judging landlord activity
simply by whether portfolios are
expanding or contracting.
Professional landlords remain
ambitious, but many are becoming
more deliberate about where they
deploy capital and the role each
property plays within their portfolio.
For some, the right decision will still
be to acquire a conventional singlelet property in an area with strong
tenant demand, but for others it could
mean refinancing existing assets,
carrying out works to improve their
performance, disposing of properties
that no longer meet their objectives,
or moving capital into a different type
of investment.
We’re seeing experienced landlords
take a closer look at the properties they
already own, as well as considering
where they want to invest next.
The question is not simply whether
they can afford another property, but
what it will add to their portfolio and
whether it represents the right use of
their capital.
Beyond conventional
That is also reflected in the types
of properties some landlords are
considering. Houses in multiple
occupation (HMOs), multi-unit
freehold blocks (MUFBs) and semicommercial property can offer
opportunities to diversify income or
improve the overall performance of
a portfolio.
Specialist properties are not
automatically beer, of course. They
are specialist for a reason, requiring
a different level of management that
won’t be appropriate or desirable
for everyone. The potential for
stronger rental income needs to be
weighed against acquisition costs,
ongoing expenses and the additional
responsibilities involved.
The point is not that every landlord
should become a specialist investor,
but that as landlords look more closely
at where they commit capital, they are
considering a wider range of options.
The same applies to existing stock.
Rather than purchasing another
property, there may be an opportunity
to refurbish or reconfigure an existing
asset to improve its income or appeal.
We are seeing experienced investors
use short-term finance in precisely
this way, including upgrading
properties and converting suitable
single lets into small HMOs.
Making beer use of an existing
property can bring different
funding requirements into play,
particularly where an investor needs
to finance works before the property
can generate the intended rental
income. In these circumstances,
short-term finance can provide the
flexibility needed to carry out those
improvements while keeping the
landlord’s longer-term plans in mind.
A different conversation
For brokers, asking a landlord
whether they intend to expand their
portfolio is useful, but it may no
longer tell you enough about what
they are actually trying to achieve.
The more revealing questions
are what would make them deploy
capital, what return they require,
whether they are seeking income,
diversification or an opportunity to
add value and, equally importantly,
what would make them walk away
from a deal.
Those conversations can take
place before a particular property
has even been identified. They also
help brokers anticipate where more
Strong tenant
demand creates
opportunities for
investors, but demand
alone is not enough to
ensure an individual
property will pay its own
way. The numbers still
need to stack up, both at
the point of purchase and
over the longer term”
specialist funding could be required,
since an investor considering HMOs,
MUFBs, semi-commercial property
or refurbishment may need a very
different solution from someone
purchasing a straightforward
single let.
The wider portfolio, ownership
structure, existing borrowing and
longer-term plan can all become
relevant. A landlord looking to release
equity from an existing property to
fund another acquisition, for example,
may have very different requirements
from one looking to refurbish an asset
to improve its rental income.
Where refurbishment is involved,
the scope and timing of the works,
how they will be funded and
the intended exit also need to be
understood from the outset.
Having these conversations early
gives brokers and lenders a clearer
picture of what the landlord is trying
to achieve, and which funding options
are appropriate.
For brokers, this means looking
beyond the next acquisition to
understand what their landlord clients
want their portfolios to achieve.
Whether that means acquiring a
different type of property, improving
an existing asset or restructuring
borrowing, the earlier those
discussions take place, the easier it
becomes to identify the right funding
approach and understand where
specialist lending can help.
October 2026 | The Intermediary
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