Helping landlord borrowers in a market that’s evolving

It’s very easy at times to dwell on the challenges faced by the private rental sector (PRS), and in particular, the buy-to-let (BTL) market.

And I’m certainly not suggesting landlord borrowers, advisers, or lenders have had a straightforward time of it lately.

But equally, there’s still a lot of opportunity within the market and what doesn’t always get the same attention is the resilience and long-term vision of today’s investor.

Interestingly, recent data from UK Finance highlighted something quite telling: a growing proportion of BTL borrowers are older. These are individuals who are choosing property investment as a key part of their retirement income strategy. They’re often asset-rich, prudent with their borrowing, and view property as a steady, long-term source of income, not a speculative gamble.

This mature segment of the landlord base reflects something important: a shift from casual to committed. We’re now seeing a more professionalised market, with investors who are prepared to plan, to stress test, and to seek expert advice. That’s clearly where advisers play a pivotal role and will continue to do so.

There’s also no let-up, it would seem, in the marked aspiration among the public to enter the PRS; perhaps more than people might assume. Recent research suggests one in three UK adults would like to own a BTL property. Despite the barriers, there is clearly a belief in the long-term benefits of investing in property. It provides a tangible asset, the potential for capital growth, monthly income and a hedge against inflation. People still see the value and it’s up to our industry to help them access it in the right way.

Social housing complements PRS

Of course, there are pressures. We’re acutely aware of the cost implications for landlords, we’ve come out of a period where mortgage rates were a lot higher than over the past decade, plus as mentioned, rising regulatory requirements and the well-publicised changes to tax reliefs.

But rental demand has not just held up, it’s increased. We are now in a situation where rental properties are in short supply across many regions, and where rental prices are rising steadily. This creates strong gross yields for landlords who are able to hold their nerve or invest wisely, particularly in high-demand, lower-cost areas.

In that context, the government’s recent Spending Review deserves comment. Some may look at the increased commitment to social housing and see it as a signal that the PRS may well suffer as a result. But that’s not a fair reading, or the one I would choose to focus on.

The UK desperately needs more homes, full stop. And we need different tenures to serve different needs. A properly funded and functional social housing sector is not a threat to the PRS. In fact, it’s an essential complement to it.

One of the problems over the past two decades has been a chronic lack of investment in social housing. As a result, the PRS has been left to fill gaps it was never designed to occupy.

That’s placed a lot of pressure on landlords, particularly those dealing with tenants in vulnerable positions or on limited incomes. If the government is now taking steps to build and improve social housing stock, that should allow the PRS to refocus on doing what it does best; providing quality, flexible rental homes to working individuals and families who want choice and who value mobility.

Of course, this kind of housing investment takes time to bear fruit. But it speaks to a wider point, that the PRS should be seen not in opposition to other forms of tenure, but as part of a balanced housing ecosystem.

We need to shift away from divisive narratives and start acknowledging each part of the housing market plays a role. Encouraging long-term investment in the PRS, while boosting social and affordable housing supply, is the only realistic way to meet the varied needs of renters today.

At Fleet, we continue to support those advisers who are helping landlords grow and sustain their portfolios in this changing market. We see the ambition that still exists. We see the professionalism of advisers and the determination of landlords who are adapting to meet the challenges.

And while no one would say the environment is easy, there are still many reasons to be positive, for landlords, for advisers, and for the renters who ultimately benefit from a more stable, better-functioning PRS.

There is an enduring need for expert guidance on property trends, active opportunities, product selection, meeting responsibilities in areas such as Energy Performance Certificates (EPCs) or licensing, and on navigating increasingly complex regulation. Those advisers who build strong relationships with landlords, and with lenders like Fleet, can help clients succeed across all this.