BTL isn’t dead, no matter what the headlines say

BTL isn’t dead, no matter what the headlines say. 60% of those aged between 16 and 34 want to own a property they rent out in the future. These budding First-time landlords are facing an uncertain market at the moment, and lenders need to step up to support brokers and clients with fit for purpose lending solutions.

Take all the doom-and-gloom with a pinch of salt. There is now, as there always is, a clear need for BTL mortgages in the market. What’s more, we still need plenty of options for first time landlords.

Now, we can’t ignore the challenges in the current market. It can be difficult to operate as a landlord at the moment, and some are selling up to escape the scene entirely. But the constantly repeated notion of a “landlord exodus” just doesn’t hold much weight in the actual data.

In the UK’s private rental sector (PRS), the number of landlords selling up has remained surprisingly steady for a while, according to Zoopla. It’s latest UK Rental Market report found that private landlords have been selling around 31,000 homes per quarter, which has remained consistent for the past four years or so. Also, around 20% of these homes are purchased by another landlord.

This percentage may only rise too. The BTL sector is still proving tempting for the next generation of investors. Earlier this year, a representative survey of people in the UK found that around 60% of those aged between 16 and 34 want to own a property they rent out in the future.

These budding, would-be investors are facing a tough time though. There is an unprecedented need for more BTL investors, without the support to match. Potential PRS reform is likely to make it harder to get plans moving, and it may make some lenders increasingly nervous.

We’re already seeing evidence of this. In 2014, £1 in every £3 lent was for the BTL market. Fast forward to 2024, and it’s £1 in every £14.

Lenders and borrowers alike need to embrace optimism, and regain their confidence. Afterall, there is plenty to be hopeful about. Yes reform may be on the way, but so too are potential opportunities. More resources for planning, new economic hubs on “grey belt” land, 1.5 million homes within five years – if it all comes to be, landlords could have much to target soon.  

And at MFS, we’re ready and willing to help those who want to get in on the action. Our BTL mortgages are designed to bring bridging-like speed and flexibility to the rental market. Moreover, all of these benefits can be utilised by first-time landlords, as well more experienced investors.

We want to play our part in encouraging growth, not shy away from it. To that end we have a range of features specially designed to accommodate first-time buyers. For instance, we accept deals with a £30,000 minimum income per application – not per applicant. We are also happy to hear from first-time landlords who may be investing in more specialist properties, such as HMOs or multi-unit freehold blocks (MUFB).

Not to mention our new Bridge Fusion product which combines the best of the bridging and BTL world. It’s perfect for those working with clients that have high value commercial and residential assets coming off of fixed rates this year - £71bn of commercial loans are due to be refinanced in the next 12 months alone, according to Bayes Business School. As investors figure out what the coming months have in store, we’ll be there for them when they’re ready to act.

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