Advisers can guide property investors on generating extra income, says expert
In 2025’s ever-more challenging rental market - with property investors potentially facing higher remortgage payments this year - brokers need to encourage landlords to be creative about generating extra income, according to an industry expert.
Chris Barwick (pictured), senior business development manager at buy-to-let lender Fleet Mortgages, believes though that landlords will withstand the challenges they face.
“It's been long predicted that the death of buy-to-let is coming, since it started 30 years ago,” Barwick told Mortgage Introducer. “Landlords are a pretty resilient bunch and no matter what happens, they just get on with it.
“If you've made a heart and mind decision to invest as a landlord and to buy properties, whether that be to supplement your income or for retirement, you're still going to want to do that. So, no matter what changes, you roll with the punches.
“It may be that your ‘dinner party landlord’ is going to fade out of the sector - it certainly is becoming more professionalised, but that's not a bad thing.”
The BTL market has come under greater pressure from tighter regulation, fewer tax breaks, Stamp Duty changes and the reintroduction of government targets to improve the Energy Performance Certificate ratings of rental properties.
Those landlords who are coming off rates fixed years ago face mortgage payments several times higher than they are used to paying – with the knock-on effect of reduced income.
“My advice to brokers who are having these conversations with clients is to look at creative ways of letting your property to increase the rents that you're getting, without having to make any significant alteration to the property,” explained Barwick.
For example, consider converting rental accommodation to a HMO – house in multiple occupancy – set-up, he suggests.
Read more: How did London's rental market fare in 2024?
How is the BTL market faring?
Fleet Mortgages enjoyed ‘decent levels of business’ throughout 2024 and a good finish to the year, but while Barwick acknowledges that the market has generally been somewhat subdued, there are opportunities.
“There's certainly a demand out there,” he commented. “I think a lot of that demand this year will be remortgage business. I don't think the industry's finished taking a kicking, for want of a better phrase. Every industry has peaks and troughs, doesn't it? I think it will adjust to the new norm, and continue to be successful.
He continued: “I think it's really important to expect and recognise change when it's happening and to adapt quickly. Obviously there are things that can change in the world which you can't control, and there's been a lot of that recently. But you need to let go of the things that you can't control and focus on the important things that you can.”
Barwick believes the industry is moving into a fresh period of normality.
“With everything that's happened over the last four or five years, we've all forgotten that the industry can operate on an even keel for a while, a baseline position,” he reasoned. “I'm hoping things don't get any worse before they get better for everybody, but I certainly think that we're into a normal period, shall we say. I'm a bit afraid to say that because something will jump out and bite us! Let's hope that doesn't happen.”
With EPC targets back on the government agenda, and all rented properties having to achieve a rating of ‘C’ or higher by 2030, Barwick is concerned that the issue isn’t receiving greater attention.
“I don't think there's enough noise being made about it,” he said. “I think because it was kicked down the road, people have kind of forgotten about it. It's certainly something that needs to be brought to the fore in the conversation - we need to be mindful of it.
“We need to see some genuine green incentives brought out by lenders to support landlords who are going to have to do some retrofitting of properties. Some of them, I think, are going to struggle. We need some clear guidelines where everybody knows what the time scales are, what needs to happen and what that's going to look like.”
Furthermore, Barwick believes the industry deserves respect from the government’s decision makers, who – in his view – should take a longer-term view on the market.
“The private rental sector houses a large proportion of people that live in this country, providing decent housing,” he emphasised.
