Reading the news or flicking through social media, the narrative is frequently that buy-to-let property investment is slowing down and that investors are now looking elsewhere.
In my experience, the opposite is true. In both of my brokerages, Fowler Smith Mortgages & Protection and Andromeda Specialist Finance, we’re seeing consistent appetite for buy-to-let investment from both clients and lenders. Clients are still buying single lets, holiday lets and also searching for suitable HMOs and multi-unit blocks.
Improving criteria
Lender appetite remains, too. They are consistently looking to improve their criteria and streamline their processes to be able to lend to more clients and, naturally, increase their market share. We often see lenders opening up to new things, whether it’s more rooms in an HMO, or allowing a remortgage from the first day of ownership (for example, after something has been bought at auction or in cash), or lending to trading companies instead of the typical SPV.
Offshore clients
In the complex space, lenders are also frequently improving their proposition for offshore clients. They are aware that overseas nationals are keen on solidifying an investment in the UK, which might have a more stable currency than their home soil, or to look to take advantage of long-term capital growth.
We’re seeing more interest in specialist deals, too. Sometimes, even new landlords are skipping the single unit purchase and looking to go straight into a conversion. Maybe a single-family home that has the potential to be converted to a large HMO, potentially allowing a commercial valuation further down the line (dependent on lender criteria, of course).
Commercial property
And it’s not just residential property that’s attracting interest. Commercial property remains an attractive option for some investors, particularly because of the potential benefits of full repairing and insuring (FRI) leases. Under these leases, the tenant maintains the property, pays for the upkeep and sorts out repairs. It’s seen as a somewhat hands-off investment for many. Commercial lending is typically more expensive than standard buy-to-let mortgages, and often there’s a bit more of a barrier to entry, heavily dependent on experience, how the property will be managed, rent collected, and so on.
The budget
There’s no denying that the budget this week is going to be the talk of the town, and many will look to wait until it’s delivered before pulling the trigger on their next investment. However, even back in 2022, what I saw was that even in a tricky market, professional and experienced landlords will continue to buy. It opens the market up to them to take advantage and grab an opportunity when it arises.
