What is happening in the Buy-to-Let market? Our regional BDMs take a look
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It has been a restless first 6 months of the year for the Buy-to-Let market, with plenty of change making it an uncertain landscape for brokers and investors.
Despite these challenges, we’ve continued to see deals come through as the demand for high-quality housing in the UK hasn’t disappeared.
To look at the Buy-to-Let market in more depth, we asked two of our regional BDMs to feed back on what has been happening in their areas.
Abigail Challen – BDM for London and Home Counties
- How has the Buy-to-Let business been in the past couple of months?
Deals have still very much been flowing, but the rate has slightly slowed down compared to the end of last year.
I think this is due to a lack of confidence in the market. Local factors like increased living costs and the cost of borrowing, as well as global factors like Ukraine, Covid and how lockdowns in China have affected and will continue to affect supply chains have all affected landlord confidence. With all that in mind I feel it is not surprising that the rate of BTLs purchases has slowed down.
- As the market has adjusted, what have your brokers and their clients been looking for?
As rates have increased, a lot of my clients are focussing more on rental yields, such as in the HMO and Holiday Let markets. High demand for these types of properties mean that, as part of a diversified portfolio, landlords can withstand the impact of higher rates.
They are also looking to invest more savvily, by acquiring and improving rundown Buy-to-Lets to refurbish into HMOs, helping with both yield and capital growth.
- What business are you seeing a lot of?
I am seeing a lot of BTLs wanting to go from personal name to LTD company through incorporation as landlords are now feeling the crunch of being in a higher tax bracket for their portfolio.
- What do you expect to happen in the second half of the year for the Buy-to-Let market?
I feel that the BTL market is going to pick up again and landlords will be ready to pounce.
A lot of landlords and investors are keen to get out capital from their portfolio to ensure they can pounce on a market that presents itself with ample opportunity. Landlords like to buy in a downwards market and hold on to the assets when the market increases and gaining equity. This is a pattern that reoccurs; it is just a matter of timing.
Nigel Robbins – BDM for Wales, the South West and the Midlands
- How has the Buy-to-Let business been in the past couple of months?
The last couple of months has seen an increase in remortgage business and those clients are looking to remortgage for longer terms. Our 7- and 10-year products are what I’m speaking most about at the moment.
- As the market has adjusted, what have your brokers and their clients been looking for?
Higher yield properties are high on the agenda , with HMO. and MUFB still the main focus. My clients have also been looking for properties that need some work, either via refurbishment or bridge-to-let, as these are presenting great opportunities to generate higher yields at the moment.
- What business are you seeing a lot of?
In the remortgage market I have seen a lot of business from landlords looking to remortgage within 6months of ownership. Typically this is to repay a bridging loan or replenish cash as the property was originally purchased with cash and they are looking to go off the current market value.
- What do you expect to happen in the second half of the year for the Buy-to-Let market?
I expect remortgage business will still be the driving force this year, along with seeing experienced landlords move their portfolios from Personal name into Ltd co. The focus on improving property stock to bring the EPC up to C or above is a hot topic among landlords at present and will only become stronger as the year progresses. This will present brokers with more opportunities to support existing clients.
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