The Intermediary – September 2026 - Flipbook - Page 19
BUY-TO-LET
In focus
Rather than focusing solely on
loan-to-value (LTV) ratios and rental
calculations, lenders are therefore
increasingly looking at items such as
cash reserves, portfolio performance,
business structure and management
experience, all of which are becoming
increasingly important.
The question is no longer simply
whether a landlord can afford
the loan today, but whether their
business is well positioned to perform
over the longer term in a more
regulated environment.
Clients are looking for reassurance
about how the market is evolving and
what it means for future borrowing.
Brokers are, in turn, helping
clients think strategically, and
acting as sounding boards as well as
finance specialists.
Examining opportunity
Across the market, many lenders
are hearing from landlords who are
reassessing their investment strategies
because of the Act.
At Redwood, we have seen similar
trends, which has reduced confidence
for some investors.
We are also finding that more
brokers are coming to us for specialist
advice and are playing a key role
in helping investors navigate the
changing legislation, lender appetite
and the evolving BTL market.
All this is particularly important
where landlords are considering their
next acquisition. A deal that looked
straightforward two years ago may
now warrant a closer examination
of rental sustainability, ongoing
management costs, and exit strategy.
Brokers who understand that
different lenders are interpreting
these factors differently can help
clients avoid unnecessary delays, and
identify the most appropriate funding
options from the outset.
In some cases, landlords may need
to invest in existing properties to meet
evolving standards; for example,
carrying out works to improve an
EPC rating.
Others may consider consolidating
borrowing, restructuring portfolios,
or reviewing whether their
current ownership model remains
appropriate. These are discussions
that oen take place well before a
mortgage application is submied.
Another area aracting greater
scrutiny is rental sustainability.
With the new procedure for annual
rent reviews perhaps feering the
ability of landlords to respond more
dynamically to market conditions,
accurately assessing achievable rental
income from the outset becomes
increasingly important.
Realistic valuations and robust
affordability assessments are likely
to carry greater weight as lenders
seek confidence that properties can
continue to perform over the life
of the loan. Combined with longer
possession timelines for issues such
as arrears, or the restrictions on
releing once vacant possession has
been secured for a sale, this means
lenders are placing greater emphasis
on sustainable rental income rather
than optimistic projections. Realistic
valuations and robust affordability
modelling are therefore also
becoming increasingly important
in demonstrating that a portfolio
can perform under a wider range of
market conditions.
The right lender
Against this backdrop, lender
selection becomes more important
than ever. Every lender will interpret
the new environment differently.
This is where experience and
relationships are irreplaceable.
Complex property businesses rarely
fit neatly into automated assessment
models, particularly where borrowers
own mixed
portfolios,
operate
through
limited
companies
or have plans
to expand.
A lending
approach that
considers the
wider picture
rather than
JILL CAREY
is partner at Freeths Solicitors
DAVID KENNEDY
is chief operating officer
at Redwood Bank
relying solely on standard criteria can
make a meaningful difference.
As landlords become more
professional and lender appetite
becomes more nuanced, brokers
have an opportunity to move beyond
product selection and become genuine
strategic advisers.
Understanding portfolio resilience,
anticipating lender expectations
and helping clients prepare for
future borrowing will become
just as valuable as securing a
competitive rate.
Brokers should encourage
landlord clients to review portfolio
performance, cash reserves, property
standards and future acquisition plans
before approaching lenders, as these
areas are receiving increased scrutiny
during underwriting.
The Renters’ Rights Act has
undoubtedly reshaped the private
rented sector, but its long-term legacy
may be the way it changes how lenders
assess risk, how landlords build
portfolios, and how brokers add value.
In that environment, strategic advice
will be more important than ever. ●
September 2026 | The Intermediary
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