2022: Buy-to-let increases

By Prospect Mortgage Services

The easing of Covid-19 restrictions has rebooted the buy-to-let market.

The Buy to Let market had stagnated in recent years due to changes to taxation for landlords and legislation. Then the pandemic hit and this, for obvious reasons, only made the situation worse. As we emerge out of the pandemic, we are finally seeing BTL rates resurge and the market becoming more competitive once again.

The year of the buy-to-let-reboot:

While some are still leaving the crowded cities, the return to the office has meant demand for housing in urban areas is back on the rise. Houses of Multiple Occupation (or HMO for short, sometimes called a ‘house share’) are also on the rise. This refers to a rented property which is shared by multiple households/tenants all with their own separate room but shared living space i.e. kitchen, living area and bathrooms.

Furthermore, a number of more fortunate people have seen their savings increase from the pandemic, having spent less through the lockdown periods or found their careers thrived from the change to remote working. They are now looking for potential invest opportunities with the extra funds available or are going after purchases they had perhaps postponed over the past two years.

Thestaycation’ summer of 2021 doesn’t appear to be going away either, and this has opened a new wave of opportunities for Landlords. On average, Brits plan to take two staycations in the next 12 months, with almost half saying limiting their environmental impact is a key consideration. Other factors for opting to holiday closer to home include the convenience and getting to enjoy the British outdoors. There is more scope for holiday-let properties and Landlords will likely be keen to take advantage of this.


Challenges ahead:

Uncertainty best describes the future of the buy-to-let market in upcoming months. Several factors pose risk.

The government have recently proposed that all newly rented properties will need to meet an EPC rating of band C from 2025. EPCs grade the energy performance of your property – essentially looking at how ‘green’ and economic it is. They score the building out of one hundred. Recent data from Shawbrook Bank revealed almost a quarter of landlord properties are currently rated D or below for energy efficiency. Potential investors that will be required to improve a property and bring it up to this standard may be in doubt, especially given the need for more work, money, and time.

Additionally, landlords will find themselves in a tricky situation as they are forced to increase rents due to rising costs of energy and the need to keep up with their mortgage repayments. However, they must find the right balance to keep their tenants happy – especially considering a lot of rented properties and HMO’s are students whose incomes will not be increasing with rising costs. They face the risk of their tenants not being able to financially afford the property.


Are you looking to become a landlord?

You can find out how much you can borrow using our handy Buy-to-Let calculator.

Buy-To-Let Calculator Tool

Simply adjust the following to calculate your mortgage costs:

  • The amount you want to borrow.
  • The interest rate.
  • The type of mortgage (interest only or repayment).
  • The number of years you wish to borrow the money over.

Please do not hesitate to contact a member of the team if you have any questions.