The Intermediary – September 2026 - Flipbook - Page 31
BUY-TO-LET
In focus
Rising rents are
only half the story
A
t first glance, the
financial position of
the average portfolio
landlord looks
increasingly strong.
Our recent analysis
found that the average UK landlord
portfolio now generates almost
£90,000 in gross rental income
each year, an increase of more than
£16,000 annually, while estimated
rental income per property has risen
by 22.9%.
For brokers working with buyto-let (BTL) clients, however, the
headline rental figure tells only part of
the story.
Today’s portfolio landlord is
overseeing a far more substantial and
complex financial operation than the
traditional image of someone owning
one or two investment properties
might suggest.
The average landlord portfolio
consists of 7.3 properties worth
approximately £1.7m. At the same
time, estimated BTL mortgage
borrowing has increased from
£642,000 to £736,000 in the last year,
despite the overall value of the average
portfolio remaining unchanged.
So, while rental income is rising, so
too is leverage. Gross rental income
should never be confused with
profitability or financial resilience.
Landlords must still account for
mortgage repayments, maintenance,
taxation, insurance, compliance,
void periods and the day-to-day
costs of operating their properties.
Across a larger portfolio, those costs
are multiplied across numerous
individual assets.
This is where the relationship
between landlord and broker is
becoming increasingly important.
Historically, that relationship may
have centred on the next purchase or
individual refinance. But as portfolios
increase in scale and complexity,
there is a stronger argument for
looking at the landlord’s financial
position as a whole. A landlord with
seven properties may have mortgages
completing at different times, on
different products and at different
loan-to-values (LTVs). They may be
considering another acquisition while
also deciding whether an existing
property should be refinanced,
deleveraged or sold.
The cheapest headline rate on an
individual mortgage therefore does
not necessarily tell you what the best
decision is for the wider portfolio.
Looking down the line
Understanding where a landlord
wants that portfolio to be in
three, five or 10 years is becoming
increasingly important.
Are they still actively expanding?
Are they looking to consolidate?
Do they want to reduce borrowing
over time? Are certain properties
performing beer than others?
What refinancing requirements are
approaching across the portfolio?
These broader questions can have
a significant bearing on individual
borrowing decisions.
We are also seeing the continued
professionalisation of the private
rental sector (PRS).
Managing seven or more properties
is effectively running a sizeable
property business. Alongside financial
planning, landlords are navigating an
increasingly demanding regulatory
and compliance environment,
while ensuring that each property is
properly maintained and managed.
That inevitably means relying more
heavily on professional expertise. The
accountant, tax adviser, mortgage
broker and property manager all
have different responsibilities, but
increasingly they form part of the
wider advisory network surrounding
a portfolio landlord.
For brokers, this creates an
opportunity to move beyond being
someone a landlord contacts when
they need a mortgage, and instead
ROMA SHARMA
is managing director
at Rushbrook & Rathbone
become a longer-term part of that
client’s portfolio planning.
This could become particularly
important as the buy-to-let sector
evolves. Higher rents demonstrate
the strength of rental demand, but
increased income does not mean every
landlord will find the economics
equally aractive.
Beer-capitalised, experienced
portfolio landlords may be well
positioned to adapt, refinance and
continue investing. Others facing
higher borrowing costs or holding less
efficient properties may decide that
certain assets no longer justify the
capital or management time required.
We could therefore see a greater
distinction between landlords treating
property as a professionally managed
investment business and those for
whom the numbers have become
harder to justify.
None of this means the outlook for
buy-to-let is necessarily negative. But
it does demonstrate why the simplistic
view that higher rents automatically
mean landlords are significantly beer
off misses the point.
The modern portfolio landlord is
managing income, leverage, assets,
regulation and operational costs
simultaneously.
For intermediaries, the value of
good advice will increasingly lie not
simply in securing the next mortgage,
but in understanding where that
mortgage fits within the landlord’s
wider business. ●
September 2026 | The Intermediary
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