The house as an investment - A look at the buy-to-let market

21 September 2023

advisersbuy-to-letInvestmentslandlordMeeting of MindsMortgagerentals

Expert: Jennifer Lloyd, Head of Mortgage Products, Skipton Building Society Facilitator: Mark Spiers, Partner, Bovill


  1. Volumes of buy-to-let mortgages for purchase show 75% reduction
  2. Mass exodus is not happening, but sellers 15% down on previous year
  3. 160k will sell with a net loss of 37%
  4. LTVs are still good <70%, and the pressure to sell is on higher LTV and recent buyers.
  5. Supply of rentals are still down from 2019. This is more pronounced in London and SE where rents have risen fastest

Discussion points:

In general participants reported a decrease in “accidental” landlords who may have inherited, and an increase in owners with multiple properties.

Lenders are looking to support private rented sector and we are seeing diversification from traditional buy-to-let, whether a mix of commercial, or HMO and other assets.  

There are more professional landlords for whom structuring ownership is key. As the numbers of larger landlords increase, so do the ownership structuring requirements. In particular with Limited companies, matters such as intra company loans, more complex underwriting decisions etc. However, they present is a complex set of accounts / structures that need careful consideration.

Professional advisers are needed, in particular for tax advice. There is potential for concierge/turnkey services, but difficult to get the advice. 

Foreign investors also need to structure.

Specialist teams are increasing in order to service the more complex clients. Specialist underwriters and others also increasing.

We are seeing a new breed of Business Development Manager (BDM), with training and education in the more complex needs, such as managing the quality of employees in underwriting. Also, BDMs post-covid can now by more geographically spread.

Cost base has increased, salaries have increased and retention is difficult.

EPC Uncertainty
Although the government has announced a pause to the EPC requirements, political uncertainty and the realities of green / environmental pressures mean that the requirements will need to come into force after the next election.

Increasing build to rent and quality assets
There are some moves away from Assured Shorthold Tenancy to conversion to HMO, with vulnerable tenants and Airbnb /holiday lets to increase yields.

However, there has been an increase in general in the quality of asset, with facilities and amenities to appeal to professionals, including build-to-rent with foreign investors.

Ability to do the deal is a bigger driver than the rate.

Criteria screens that are certain and known are key
Getting the deal through with certainty, through upfront criteria in which the broker is getting to know the lender’s detailed criteria will be a driver for success.

Qualifying the deal upfront and then being confident is extremely valuable for both manufacturing and distribution. Speedy confident decision making is also key.

Key takeaways:

  • There is an increasing need for advice in the journey for inherited property
  • Flexibility and training are key in lending/broker offerings, including training for the broker group to upskill the broker sector
  • Lending criteria that are published, and certain, should be encouraged