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Sophie Mitchell-Charman

Commercial Director LendInvest

Can ’ t quite put my finger on when I first heard it , but it was definitely at least 6 months ago .

A lot of bold statements have been made about the buy-to-let market in the past year , and we ourselves have contributed ; loudly declaring at the start of June that buy-to-let was back , before the market then proceeded to have another – shall we say – choppy few weeks after .

Despite these challenges however , we ’ re still ready to back the brokers , landlords and the buy-to-let market with the new range we launched this week .

Starting from 5.3 %, it is a significant reduction across our product range and is a statement of intent for where we see the buy-to-let market going in the back end of 2023 . Here ’ s why we ’ re doing it .

It feels like a long time ago when people kept saying everything would be back to normal in 6 months ?

A ‘ new normal ’

For some the challenges of the past year have been a reason to tap out of the market .

This isn ’ t , however , an end of days moment . It is a natural churn that happens in any market turbulence .

Crucially though , investing in the property market is a long-term investment – which the Renters Reform Bill looks set to make an even bigger priority – and rather than being left to their own devices , we want to help brokers lead their clients through this into the new normal .

The advantages offered to landlords

The greatest pressure mortgage interest rates have applied is to the homeowner market , where higher interest rates have put pressure on the higher LTIs needed over the past 10 years to support homeowners .

For asset or capital-supported buy-to-let landlords , re-entering the market to grow their portfolios should be more simple than the homeowner market , especially with lower rates ready to support them .

Leveraging across their portfolio to invest in new properties is simple , the change might need to be the level of capital they raise to ensure lower LTVs on newer properties if they want to keep rates even lower .

Obviously this comes with risks as all property investing does , but the work landlords did over the past decade should place them well to diversify that risk across their properties .

Understanding market needs

What else needs to be considered in this ‘ new normal ’ is the type of properties that work for both tenants and landlords .

Rental demand is at an all-time high , and the greater focus on rental properties through the Renters Reform Bill is putting a premium on high-quality properties tenants can make a long-term home .

How can landlords balance these needs , with the need for the right yields ?

1 . Maximising potential

Larger HMOs and MUFBs have a crucial role to play in the new normal , both in ensuring the need for rooms is met , and in allowing landlords to maximise yields but spread it across their property so as to not pass on increased rates to tenants .

2 . Investing in existing properties

EPC requirements , Renters Reform Bill and increased rents : - all reasons for landlords to spend time investing in their existing property to make sure they can build properties for the longterm that their tenants see value in .

Longer-term renting is going to be a big feature of the post-reform bill era , and landlords need to be prepared for it .

Whatever the new normal looks like , one thing we ’ re convinced of is it is time to stop putting it off and make it happen ; and we ’ re going to back brokers and landlords every step of the way .

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