"With interest rates still being high and tax rates going up, there’s no question that the golden age of buy-to-let is over for the hobbyist investor"
- Jamie Wiliams - Pure Property Finance
The days of casual buy-to-let landlords are numbered, and that’s not a bad thing for the UK property market.
As tighter regulation, reduced tax relief, and increasing compliance requirements push part-time investors out of the market, the shift toward professionalised portfolios is creating demand for more flexible, tailored finance products.
Jamie Williams of specialist property brokers, Pure Property Finance, believes the market correction is an evolution rather than a crisis:
“With interest rates still being high and tax rates going up, there’s no question that the golden age of buy-to-let is over for the hobbyist investor."
"However, what we’re seeing are serious and very experienced landlords stepping in to build smart and sustainable portfolios. These often have a longer-term outlook, better tenant management and a greater understanding of risk compared to your average Joe who wants to just rent out his old flat."
"This is a net positive - it removes froth from the market, creates more consistent demand for specialist lenders and pushes innovation in finance products that actually serve the real needs of property businesses in the modern world.”
According to UK Finance data, the number of new BTL mortgages granted declined from 25,280 in Q4 2022 to 12,422 in Q1 2024. This is a huge 53% drop in just over a year.
However, Pure reports an increase in demand for portfolio finance, development finance and bridging finance, particularly among landlords that already have several properties.
Jamie adds, “We’re moving away from the one-man-band landlord and toward a more corporate, strategic approach to property investment. This means new financing needs; everything from development exit loans to complex portfolio refinancing, and that’s where specialist lenders thrive.”
“The new opportunities include the opportunity to refocus efforts on higher-value clients who will be more likely to reinvest, refinance or scale up in the future. There’s also an opportunity here for education and financial planning, and we’re able to help investors move from a reactive to a more strategic model.
"As well as this, finance products can be more aligned to evolving landlord profiles and portfolios, including ESG-linked loans and underwriting.”
