Thinking about buy-to-let? What current and future landlords need to know - Andrew Milnes
Rental yields are among the strongest they’ve been in years, providing a much-needed boost for existing landlords and an incentive for those considering entering the buy-to-let market.
However, while the potential returns are encouraging, purchasing a buy-to-let property shouldn’t be approached lightly. Anyone thinking about becoming a landlord or expanding a portfolio should do so with a clear understanding of the opportunities and responsibilities.
After a period of rising interest rates, regulatory changes, and uncertainty across the housing sector, many landlords are reassessing their position. While opportunities remain attractive, the landscape is evolving quickly, and success depends on being organised, informed, and prepared for upcoming changes.
One of the biggest priorities for landlords is preparing for the upcoming Renters’ Rights Act. By speaking with your letting agent now, you can make sure you know the likely timelines and all the requirements needed on your side.
Regardless of your experience, a good letting agent should already be helping you prepare for changes to tenancy management, compliance, and communication.
Energy efficiency is another issue current and prospective landlords can’t afford to ignore. Retrofitting and improving energy performance have quickly become essential parts of being a landlord rather than optional extras.
If you’ve not yet started looking at how to improve your property’s EPC rating to at least a C, now is the time to begin planning. Although proposed deadlines have been pushed back, this shouldn’t be a reason to put it off. Landlords who delay may face higher improvement costs or restrictions on letting their property long-term.
The good news is that lenders are increasingly supporting these changes. Many now offer green incentives, including lower mortgage rates for properties rated A, B or C. Some also provide interest-free further advances for energy efficiency upgrades.
Broader market changes are worth keeping in mind, particularly around leasehold properties. As an example, planned ground rent reforms in 2028, including a proposed cap of £250, could have significant implications.
For some investors, this may be seen as a negative, particularly as the government continues to examine leasehold structures more closely. However, the evolving landscape may also bring greater clarity and potentially improved conditions for buyers.
As well as being clear on the path forward, it’s important to know as well when you plan on exiting it. Are you buying for shorter-term capital growth, or building a portfolio to pass on to family?
Ownership structure is another important factor, and your exit strategy should guide this decision. Both personal ownership and limited company ownership have clear advantages and disadvantages, so it’s important to choose the structure that most aligns with your goals.
There are several important factors to consider before making a purchase and speaking to an experienced mortgage adviser can help you explore the most suitable financing options. Andrew Milnes is head of the Mortgage Advice Bureau, Bingley, 01274 891312