Landlords – Buy-to-Let

LANDLORDS have proved to be a fairly resilient group, and may have built up a greater resolve than most to face the current recession.

As it stands, in this strange property market, the average monthly rental income across the UK is still holding up at £985, up 1.5% year on year.  In fact, 11 of the 12 regions all showed an increase, with the exception of Greater London – albeit the average rental value there was £1,653 – 100% higher than the figure for the rest of the UK (£825).

(Source: HomeLet Rental Index, August 2020)

Financial stability of tenants

The main concern for landlords into the near future will be hoping those rental payments continue to come through, as there’s the likelihood that some tenants will fall on hard times as the furlough scheme comes to an end, raising the possibility of void periods.

However, it’s not just a case of ‘sit and wait’, as there are a number of initiatives landlords could undertake to help recession-proof their business.

Time to remortgage?

Buy-to-Let mortgage rates remain low although – as with the residential sector – rates are starting to creep up.  So, if you haven’t already assessed what’s on offer, perhaps it’s time to take stock.  Dependent on the deal you’re on, there may be savings to be made.

(Source: Moneyfacts, 8 September 2020)

Alternatively, you may want to consider pooling together your properties into one mortgage, but do be aware there are benefits and disadvantages of this course of action.  The same can be said about considering a Limited Company structure to help mitigate the tax changes.  As well as talking to your accountant about these issues, do get in touch with us, as we can look at your particular situation and help identify what may work best for you.

Make new investments, and/or restructure

Landlords will also benefit from the short-term reduction in Stamp Duty fees.  As was the case previously, the 3% surcharge still needs to added, but the current charges could deliver a substantial saving on a property purchase ahead of 1 April 2021.

With regard to purchasing additional properties, the normal disciplines apply, such as:

– don’t buy a property that you’d like to live in yourself.  You need to love the deal, not the property.

– research the area and understand market conditions.

– decide on the type of renter you want.  Properties that can be let, for example, to multiple tenants, such as Houses in Multiple Occupation (HMOs) could help to spread the risk of any rental voids, as you’ll receive an income from various people.

– shying away from student rents, in the current climate, and possibly being drawn to a slightly different form of renting – holiday lets.  The rise of the ‘staycation’ will increase the demand for this type of property.  But again, talk to us, as this is a different form of borrowing compared to the normal buy-to-let loan process.


There is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income will be sufficient to meet the costs of the mortgage.

The value of your Buy-to-Let property and income from it can go down as well as up.  You may also require advice on the legal and tax issues.

The Financial Conduct Authority does not regulate legal and taxation advice, and most Buy-to-Let mortgages.

HM Revenue & Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

 You may have to pay an early repayment charge to your existing lender if you remortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.

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