Chat to a team member

Blog

Buy-to-let market breaks off in two distinct directions

Mark Posniak Mark Posniak
Posted on Apr 19, 2018 | in Blog

Everyone involved in the property industry will know exactly how hard buy-to-let has been hit over the past few years. A raft of punitive tax and legislative changes have turned this once untouchable, near-imperious market on its head.

The result is an ongoing schism, or splintering in buy-to-let, and one that is picking up steam. Basically, the market is breaking up and heading off in two distinct directions.

On the one hand, many amateur landlords are reducing their exposure or exiting the sector altogether, as the numbers simply no longer stack up for them.

The sharp rise in buy-to-let remortgage activity announced by UK Finance this week reflects how landlords, especially amateur ones, are having to refinance their portfolios en masse simply to keep their heads above water.

Yields have been decimated and for more geared landlords in particular remortgaging is absolutely essential to maintaining a viable portfolio.

On the other hand, professional, and increasingly institutional landlords, are piling in to the buy-to-let sector because they have the financial strength, expertise and scaleability to make it work.

Indeed, if there's one major growth sector in the market at present, it's the Private Rented Sector, or 'build-to-rent'. A separate report issued this week found that most millennials will be renting in retirement and that in itself underlines the fundamental changes taking place in the UK property market — and the significant commercial opportunities that lie ahead.

One other clear trend we're seeing in the buy-to-let market is that landlords, amateur and professional alike, are increasingly turning to specialist or challenger lenders who are more willing to embrace the increased risk that's now ingrained in the sector.

The high street may have had enough of buy-to-let, but specialist lenders such as ourselves, are still keen to provide all-important finance — and oil the sector's wheels.

 

More in this section

Mark Posniak

Four years old, flat out and having fun

Feb 24, 2021 | Blog

I can’t believe that this week we celebrated our fourth birthday,…

Mark Posniak
Mark
READ MORE

Specialist lending flies over the cuckoo’s nest

Feb 11, 2021 | Blog

If the closing stages of 2020 were crazy, the start to 2021 has…

Mark Posniak
Mark
READ MORE

Redemptions milestone amid pandemic my proudest moment yet

Jan 15, 2021 | Blog

Over the years the team here at Octane has achieved many great…

Matt Smith
Matt
READ MORE
Sections
Archive
Twitter
Follow us @octanecapital

14 hours, 5 minutes ago
Looking forward to announcing the first teams to have qualified in the coming days with the first announcement tomo… https://t.co/JL2ZXtLTw6

2 days, 17 hours ago
Ok so today is officially called Blue Monday which is supposedly the most miserable day of the year! To brighten u… https://t.co/j4gImIOnXK

1 week, 1 day ago
BTL completion within auction timescales! Octane Capital Ltd is delighted to complete a #3rdGen £378,000 #BTL loan… https://t.co/whoRUlnRuL

1 week, 2 days ago
If you are looking for a great way to start 2022, look no further! Why not add the Octane Capital Ltd #3rdGen… https://t.co/nlhejCYIZE

1 week, 6 days ago
Absolutely thrilled to announce that Octane Capital Ltd has been shortlisted in four categories for this years' Bus… https://t.co/XQbYTIEhFT

2 weeks ago
Back in the Octane Capital Ltd office today and was delighted to present Graham Butcher with his #3YearsService awa… https://t.co/pJUaaJClkg