How brokers can help landlords navigate a dynamic BTL market – Atkins

Financial and regulatory pressures are driving some landlords to exit the market, while others are doubling down by expanding and diversifying their portfolios.

In this dynamic environment, we think brokers have an important role to play in supporting landlords as they navigate shifting market conditions and seek to capitalise on new opportunities.

Financial and regulatory challenges 

While the Bank of England has gradually lowered its base rate since August 2024, rates remain significantly higher than pre-2021 levels. Landlords who have been on longer-term fixed rate deals will be remortgaging onto considerably higher rates, potentially reducing their profit margins.

Operational expenses have risen too, with inflation driving up maintenance costs and insurance premiums. 

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Landlords have also been affected by the introduction of higher capital gains tax (CGT) rates and increases to the stamp duty surcharge. These changes followed the implementation in 2020 of Section 24 – commonly known as the ‘Landlord Tax’ or ‘Tenant Tax’ – which removed the right for landlords to deduct most of their finance costs from their rental income before calculating their tax liability.

Looking ahead, the Renters’ Rights Bill, which is expected to become law later this year or in 2026, will significantly reform England’s private rented sector, introducing greater protection for tenants. Changes to Energy Performance Certificate (EPC) requirements for privately rented properties are also on the horizon.

New opportunities 

Despite these challenges, the BTL space remains active. Q4 2024 saw 52,648 new BTL loans advanced in the UK – up 39.2% by number compared with the same quarter in the previous year, worth a total of £9.6bn. 

Over the past decade, landlords have increasingly operated via limited companies for tax efficiency, with a record number of new limited companies being set up to hold BTL property in 2024. We are also beginning to see a new generation of landlords in the UK, with 22% of new BTL mortgages taken out by landlords aged 18-34 in 2024, up from 15% in 2014. 

Several emerging trends are also creating new opportunities in the BTL market. Higher living costs and rent increases have pushed more tenants towards shared living solutions, resulting in rising demand for houses in multiple occupation (HMOs) – which can offer landlords higher rental yields than traditional BTL properties. 

Meanwhile, as momentum builds around the need for more energy-efficient properties, some landlords are exploring developer incentives on new builds, which already meet the requirements of forthcoming EPC reforms. This is a trend we’ve seen at Kensington since the introduction of our BTL prime range, with some brokers reporting that one in four new-build applications are now for BTL.

Looking ahead 

In a complex environment, landlords are responding to changing market conditions and looking at alternative locations and property types that offer healthier yield and demand dynamics.

By providing landlords with their deep understanding of criteria, products, and the needs of their clients make them essential to landlords navigating this dynamic market.