Looking ahead: how landlords can find new opportunities within a turbulent market

Jon Cooper, head of mortgages at Aldermore, looks at the future of property investment in the UK and identifies the opportunities available for landlords amid the challenges in today's market.

Related topics:  Finance,  Landlords,  BTL,  Portfolio
Jon Cooper | Aldermore
27th March 2023
Jon Cooper Aldermore 627
"The outlook may be difficult right now, but with house prices expected to fall this year, it may present an opening for landlords to take stock of their current portfolio and consider adding to it"

Last year saw levels of inflation not seen in a generation, a cost-of-living crisis and housing market volatility. It’s been a perfect storm. It comes as no surprise that 2023 spells difficult times for some landlords but there are definitely opportunities out there amidst the economic uncertainty.

As we’re about a quarter of the way into 2023, it seems like a good moment to take stock. The guidance of brokers remains vital for landlords as we look ahead. From being able to help identify new opportunities, offer advice on how to futureproof landlords’ portfolios (particularly when it comes to meeting the Government’s proposed energy performance certificate or EPC regulations), as well as provide further support to help with any challenges that may occur.

A challenging backdrop

The property market faced major turbulence in 2022. After the traumatic “mini-budget” in September, mortgage rates were sent rocketing to above 6%, a level last seen in 2008. Despite house prices being lifted by the pandemic, they are now slowing due to inflation and this year the mortgage market feels like it will see lending volumes return to 2019 levels.

Our recent research found that 49% of landlords felt it was harder being a landlord compared to the same time last year, whilst 62% said they’ll be driven to raise rents by at least 10% in the next 12 months.

The outlook may be difficult right now, but with house prices expected to fall this year, it may present an opening for landlords to take stock of their current portfolio and consider adding to it. There will – without a doubt – be opportunities for the better-prepared and shrewd landlords out there to take advantage of these circumstances, which we’re already starting to see in the houses of multiple occupancy space.

Whilst some recent figures show an apparent decline in HMO numbers, from an anecdotal perspective, the enquiry levels across the specialist space are on the rise. This is no surprise given the lucrative yield that can be achieved with multi-let properties in certain areas of the UK.

New opportunities

Working closely with a broker can help landlords to identify opportunities that lie ahead for them. Brokers who understand the longer-term portfolio aspirations can navigate through transactions that will save landlords on fees and costs, especially given the current challenges on interest cover ratio hurdles that may limit the lenders available to them.

Yield will always be one of the major reasons why landlords invest in property. However, in today’s ‘reset’ market it has seen cities in the South struggle to meet the required ICR hurdle. In these market conditions, landlords may look to diversify their portfolios into different locations and our annual Buy-to-Let City Tracker points towards cities such as Glasgow, Hull, and Stoke, all of which achieved yield returns of 8% or higher.

Our Tracker also highlighted the top ten cities for overall BTL investment, factoring in a range of metrics. Big cities such as Manchester, London and Bristol took the top three spots. It emphasises that certain locations will offer landlords the best investment opportunities, but it’s important to look for areas that offer value not only for the short term but for the longer term too.

For example, less heralded cities such as Cambridge, Peterborough, Luton, Southend, Basildon, Norwich and Chelmsford were all found to offer attractive long-term returns. Southend saw the biggest average annual increase in house prices of all 50 cities featured, with a rise of 5.9%.

The longer-term prospects for locations such as Milton Keynes and Peterborough also jumped over the last year, with property price growth in Milton Keynes rising from 4.6% in 2021 to 5.6% in 2022, and in Peterborough from 3.86% to 5.2% during the same period.

Brokers will always have their ears to the ground when it comes to property hotspots and new investment opportunities, offering another advantage for landlords who choose to work with them. As a broker, how you market your business is more vital than ever. The trend of client and broker relations being mainly locality based is shifting, with many now utilising online presence to assist clients nationwide.

Sustainable growth

When considering what might also be at the forefront of landlords’ minds, we know many will be looking at making their portfolios more sustainable to meet the Government’s EPC regulations, with new standards coming into effect in 2025.

Our research shows that 58% of landlords say that the sustainability and energy efficiency of their property portfolio is a priority for them. In an effort to get ahead of the regulations, 53% are planning to carry out property improvements in the next 12 months to improve the energy efficiency of their portfolio.

As all rental properties will need to have an EPC rating of C or above, planning now is important to beat supply shortages, spread the cost and increase flexibility. Changes to your property could be as simple as insulating walls and floors and upgrading the lighting in your home to energy-efficient LEDs. There are numerous benefits to making the improvements, such as adding value and protecting your property.

At Aldermore, we’re acutely aware of the need to provide incentives and product options for landlords in this area. That’s why, in late February, we introduced reduced BTL rates for properties with an EPC rating of A, B or C. Raising capital to fund improvements isn’t always necessary, but if you need insight into the potential costs and works required, take a look at our energy performance page here.

This will show you three real-life examples of improvement areas needed plus the approximate costs associated to enhance the EPC ratings.


Looking ahead – and despite the current doom and gloom – there are still great opportunities for landlords in 2023. Working closely with a broker can help landlords to feel more positive as we navigate the current economically challenging backdrop and ensure there aren’t any unexpected shocks down the line.

At Aldermore, we want to help people to go for it in life and in business and will continue to offer our broker partners and borrowers the tailored and expert support that they need. Our experienced underwriters assess every application on its own merits and look for ways to say ‘yes’, so we can try and support you no matter the circumstances.

My message to landlords is simple; if you can, work closely with a trusted broker. Utilise their unparalleled experience alongside your own know-how, and you’ve got a much better chance to thrive in the months ahead.

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