Almost half of portfolio landlords intend to refinance in the next 12 months, creating an opportunity for brokers to review clients’ wider borrowing needs and identify opportunities to improve, restructure or expand their portfolios.
The latest data from Pegasus Insight found that 46% of landlords with four or more buy-to-let mortgages plan to refinance at least one mortgage in the coming year.
Portfolio borrowers with four or more buy-to-let mortgages who are planning to refinance expect to do so across an average of 3.7 mortgages each.
Across all landlords with buy-to-let borrowing, 38% intend to remortgage or product transfer over the same period, with those planning to refinance expecting to do so across an average of 2.9 mortgages.
For brokers, this presents an opportunity to support clients in taking a more strategic view of their investments and borrowing arrangements. Rather than focusing on the mortgage reaching the end of its term, early conversations can help establish what landlords want to achieve next – whether that means restructuring their portfolios, investing in different regions or exploring ways to add value to existing assets.
While 44% of landlords are planning to scale back their lettings activity over the next 12 months, 5% intend to expand their portfolios. Expansion plans are most evident among larger landlords, particularly those with 11 or more properties, limited company landlords, and those holding four or more buy-to-let mortgages, suggesting confidence remains strongest among more established investors.
The report also found that 85% of landlords continue to make a profit from their lettings activity, with profitability remaining broadly stable over the past six years. Average rental yields are also unchanged at 6.4%.
Grant Hendry, director of sales at Foundation, said: “The private rented sector continues to play a crucial role in the UK housing market, and these findings show that there is still a substantial number of landlords actively managing and investing in their portfolios. As operating conditions have changed, landlords have continued to show their resilience and ability to adapt, with the vast majority building diverse and profitable businesses.
“For proactive advisers, the level of refinancing anticipated over the coming year represents a valuable opportunity to have those conversations early and to add value by understanding what clients are looking to achieve. Rather than an exit, this is increasingly focused on adjusting their strategy, restructuring their portfolio and expanding their reach.
“The right funding remains absolutely crucial, particularly for larger portfolio landlords and those operating through limited companies, whose borrowing requirements can be more complex and may not always fit standard high street criteria. This is where a specialist lender like Foundation has an important role to play, providing the expertise, flexibility and range of options needed to support a broader range of property investors as their needs evolve.
“We work closely with advisers to support landlords of all shapes, sizes and requirements, including complex limited company structures and larger portfolios. As refinancing is expecting to play a significant role in the buy-to-let market, proactive advisers need a flexible and responsive lender to meet the changing needs of their clients.”
