"Landlords were not enamoured of the Budget - that is obvious - but they are taking steps to mitigate against measures which may increase their costs, and many plan to add to portfolios, shift ownership structure, and raise rents, in order to ensure they remain profitable"
- Rob Stanton - Landbay
Buy-to-let lender, Landbay, has released findings from the first iteration of its revamped landlord survey, which shows landlords are fully aware of the challenges facing the sector and remain actively engaged in the market, focused on the opportunities available to them.
The survey - conducted at the end of December and start of January - found around 40% of landlords felt negative about the outlook for their own buy-to-let businesses, a result Landbay said reflected immediate sentiment following the Autumn Budget, which appeared to have a material impact on landlord confidence.
However, the majority of landlords were either positive or neutral about their buy-to-let activity, underlining how they are continuing to plan and adapt rather than step back from the market.
Landlords are currently reviewing their options
Despite ongoing tax and regulatory pressures, including new responsibilities required by the Renters’ Rights Act and the introduction of a 2% property income tax rise due in 2027, Landbay said most landlords appear measured and cautiously optimistic about their own portfolios and future investment in the private rented sector.
Almost half of the respondents said they do not currently plan to buy or sell properties over the next 12 months, although a third are planning to act, while a significant proportion said they were still reviewing their options.
When asked whether the Budget would influence their plans over the next 12 months, there was an even 44% split between landlords on whether they would buy or sell as a result, with the remaining 12% saying it had not impacted their plans.
For those who do plan to act over the next 12 months in terms of restructuring portfolios, a clear majority said they expected to review ownership structures, potentially moving property held in individual names into limited company vehicles, as well as reviewing purchase plans and potentially raising rents.
However, planned rent increases were typically modest, with most landlords expecting to raise rents broadly in line with inflation or slightly above, reflecting slight uncertainty around future costs and compliance requirements.
Shift in pricing environment presents remortgage opportunity
One of the strongest signals from the survey related to mortgage pricing. More than a third of landlords said the rate of their most recent buy-to-let mortgage was above 5%, which Landbay said reflected deals secured during the peak of the recent rate cycle.
At the same time, landlords were looking ahead over a long time frame. Five-year fixed rates were the most popular choice when respondents were asked what they were likely to choose as their next remortgage, highlighting a preference for stability and longer-term certainty.
Landbay said the combination of legacy pricing and forward planning created a clear opportunity for landlords to review their existing finance. The lender’s own Premier range currently includes two-year fixed rates from 3.24% and five-year fixed remortgage products from 4.09%, both available up to 75% LTV, with free valuations on remortgages.
The lender said remortgaging to the lower rates now available in the market, after recent shifts downwards in price, would represent a significant saving of many thousands of pounds for landlord borrowers, and would go a long way to mitigating any increase in costs they may see during the year ahead.
It urged advisers to communicate with existing landlord borrowers and to highlight the current product pricing available via its own range and those of other active players in the buy-to-let sector.
Landlord borrowers value advice
The survey also found continued support for advisers, with around three-quarters of landlords saying they would use the same adviser again for their next mortgage.
“The results of this new iteration of our survey show landlords are incredibly realistic about the current pressures in the sector, particularly around tax and regulation, but also that they are actively engaged with the market, and looking for ways to improve the performance of their portfolios," explained Rob Stanton, sales and distribution director at Landbay (pictured).
“Landlords were not enamoured of the Budget - that is obvious - but they are taking steps to mitigate against measures which may increase their costs, and many plan to add to portfolios, shift ownership structure, and raise rents, in order to ensure they remain profitable."
“One of the key takeaways, however, is just how many landlords are carrying higher-rate mortgages arranged when pricing was less favourable. The good news here is that over the past six months in particular, pricing has shifted considerably, and advisers are likely to be able to secure some considerable savings for those borrowers coming up to remortgage."
He added, “Our own Premier range has products starting with a three, far below the 5/6% deals a large number of landlord borrowers are currently on, and this presents a clear opportunity for advisers to revisit those clients and potentially secure much more favourable rates."
“With product transfers increasing across the market, it is vital that advisers remain close to their landlord clients. Reviewing existing borrowing and understanding how pricing has changed can make a meaningful difference to monthly costs and future planning."
Rob concluded, “At Landbay, we remain firmly intermediary-only. Our Premier range, alongside our adviser-led product transfer proposition, is designed to support advisers and their landlord clients as they navigate a more complex but opportunity-rich market.”
