As we enter the first few weeks of spring, there is still a lot of noise about the future of buying (BTL) and the broader private rental department (PRS).
However, just as spring has the meaning of rebirth, rejuvenation, renewal, resurrection and regeneration, I sincerely believe that for the promised landlords, these adjectives can accurately reflect BTL in both instant and mid-term.
Over the past decade, countless legislative changes as landlords and the significant resources needed to stay ahead have undoubtedly polarized the market. As a result, PRS mainly became the home of portfolio landlords.
Modern landlords continue to show perseverance
Whether we think this is controversial for society as a whole, but the pathways for these landlords are obvious. According to the latest research by Hampton, BTL has become the largest single business in the UK.
The BTL company is four times as high as the fast food restaurant registered in the company House, which seems to indicate that landlords who stay in the market, even those who choose to enter now, have been in it for a long time, thus holding property in the structure, allowing them to both legally reduce taxes and create a definite strategy for the estate and inheritance plans.
Record damage
In February, the number of companies holding BTL properties in the UK was actually 400,000. Between them, they have over 680,000 individual BTL properties.
This is sober when taken in the context. The total number is 400% higher than the number of limited companies holding properties in February 2016 (92,975), a year after the announcement of full mortgage interest tax, personal ownership will be withdrawn.
Loyal investors have net positive
I’m not trying to portray the panglossian point of view of BTL. It must be admitted that last July, the financial report of British banking institutions said the industry shrank for the first time in nearly three decades. Indeed, the number of new BTL mortgages granted has dropped significantly from their peak a few years ago due to higher interest rates, stricter tax measures and increased regulation, which has led to the enthusiasm of investors among some smaller amateur landlords.
Despite the obvious efforts of the government to stop PR, some contribution must be made. According to the crisis, the city council spent £22.9 billion on temporary accommodation from April 2023 to March 2024, up 29% from £1.77 billion the previous year.
Half of this total expenditure (£1.34 billion) is on paid accommodation and bed and breakfast per night, which is the least suitable form of temporary accommodation.
We should be optimistic about the prospects of landlords and brokers willing to develop and adapt.
We are seeing increasingly experienced landlords working with councils to provide housing for vulnerable tenants. Although this provides much-needed services to the Council and, crucially, those tenants, the increasing dependence on the most inappropriate and expensive forms of temporary accommodation emphasizes the priority that government should become: severe social housing shortages.
Reassuringly, modern landlords continue to show great resilience and perseverance when seeking advice from professional financial brokers and their tax experts. The demand for rental properties remains high due to the long-term housing shortage (not to mention affordable housing).
PRS mainly becomes home to portfolio landlords
Over the past few years, the upward pressure on rents has increased significantly (recent signs indicate a bit of a rapid increase in rent cooling).
All of this means net positives for BTL investors and landlords who are committed to the market.
We should be optimistic about the prospects of landlords and brokers willing to develop and adapt to the complex, professional needs of PRS.
Matthew Rowne is the director of the buyer
This article is in the April 2025 version Mortgage Strategy.
If you want to subscribe to a monthly print or digital magazine, click here.
