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For a functioning market, ‘the maths has to add up’ for landlords – Cox

by: Steve Cox, chief commercial officer at Fleet Mortgages
  • 23/11/2022
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For a functioning market, ‘the maths has to add up’ for landlords – Cox
There appears to be a growing discussion about the future of the buy-to-let sector and what the recent mortgage market upheaval generally means for landlord activity within the private rental sector (PRS).

Those of us who have been around this industry for a long time, might well feel ‘T’was ever thus’. I’ve lost count of the number of times commentators have suggested the buy-to-let was ‘dead’ over the years, and yet here we all still are with the PRS being even more important to an increasing number of people in the UK. 


Things to contend with 

That doesn’t of course mean that we don’t have an intriguing and interesting environment at present, and there are clearly issues to be addressed across a number of areas which are weighing heavily on landlords and how they move forward with portfolios. 

Not only do we have the recent move in mortgage pricing, but of course, there are wider issues around property supply, rents, yields, energy efficiency, tenant demand, etc. 

Fundamentally however – and I think this can sometimes get missed in terms of having a fully-functioning buy-to-let/PRS sector particularly by policy makers – the maths has to add up.

Now, of course, this is a completely obvious point to both advisers and their landlord clients who will spend a considerable amount of time and energy focused on this. My own feeling is that if this was taking into account more across the board, then we would have a bit more of a sympathetic stance towards landlords and their ability to keep supplying the market with the properties that are so readily required. 


Release the landlord burden 

I’m writing this prior to the Chancellor’s next fiscal statement, which I think we can call a Budget in all but name, and so there is an opportunity here – at the very least – not to add to the burden landlords are currently facing. 

A chance to recognise that the maths has become a little bit more difficult for landlords in recent months and, through no fault of their own, they are looking at a finance and profitability situation which may be much changed from what they have been used to in our recent low-interest rate environment. 

There is a positive of course in that this situation does shift with every passing day. We are already some distance from the post-Mini Budget debacle and the ‘Budget’ may well calm markets further allowing rates to begin to draw further away from their more recent highs. 


Positivity ahead 

The outlook for rates in 2023 already looks more positive, and I suspect that the start of next year will provide something of a reset for the entire mortgage market, at which point we’ll start to see a much more competitive environment. 

This may well make the ‘basics’ of property investing a little less expensive, and hopefully should allow existing landlords to feel more comfortable with their continued involvement, but allow them to add to portfolios, and hopefully bring in new blood to the PRS.  

God knows it needs it given the huge amount of demand we are seeing. 

If the government could recognise that investing in property is not simply a means by which to print money, and that it comes with some considerable (and growing) costs, that would be a real start.  

I hope it will give confidence to all buy-to-let market stakeholders that its importance within the UK housing market is front and centre when it comes to policy decisions. 

From our perspective, we’ll continue to work with advisers to ensure their landlord clients get the refinance they need, and that we can support those acquisitive investors who do want to add to portfolios.  

Hopefully, the weeks and months ahead will allow the entire lending community to bring more product and choice to market and we can make the property maths add up in a much more attractive way.  

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