In fact, it’s not just battle-hardened landlords keeping the market buoyant. Recent industry figures indicate buy-to-let is more popular than ever, with over 2.5 million UK-based investors in the last tax year – 5 per cent up on 2016/7, and 27% higher than just five years ago.
UK property has long been seen a stable and reliable way to invest your money, thanks to its long-term upward trend that easily outperforms the returns from other investments. Simple supply and demand explains why property makes such a good investment, with housebuilding failing to keep pace with our growing population.
Buy-to-let investors play a key part in making up the shortfall, bringing existing properties into more fruitful use by dividing, rearranging and refurbishing and the sector remains profitable, despite the changes. Even so, investors are adapting their business models and diversifying their portfolios to protect their income and returns.
Complex properties that may previously been overlooked, like HMOs and mixed-use developments, are increasingly popular; as is using commercial mortgages to buy rental properties through a limited company. This is especially true in more desirable, up-and-coming towns and suburbs far from the prime London and commuter belt markets.
However, these complex purchases – coupled with more robust underwriting checks – are causing financing headaches for portfolio landlords, especially those whose cash is tied up in assets. Some mainstream lenders aren’t keeping pace with change in the industry, being reluctant or unable to provide adequate funding when it’s needed – often at short notice.
This is something we often hear from our customer base. They come to us looking for buy-to-let or auction finance that works in the real world, with all of its quirks, complications and deadlines.
As long as lenders keep innovating with their products to meet the changing needs of landlords and property investors, there’s no reason to believe that the buy-to-let sector won’t continue to overcome whatever challenge it faces.
