PR: How would you describe the current state of the UK buy-to-let market, and where do you see the strongest opportunities for investors right now?
SC: Landlords with larger portfolios are generally better placed to respond to tax, regulation and changing market conditions. As a result, it is often those landlords who remain committed to the sector and may be on the lookout for opportunities created when another exits that market.
When assessing the state of the market, one of the most important factors is demand, and demand for good-quality rented homes isn’t going away anytime soon. One reason for this is the fact that the private rented sector now supports people at different stages of life and with a much wider range of housing needs.
Opportunity lies in understanding this and the landlords who invest strategically to respond to renters’ changing needs are going to be the ones who run successful lettings businesses.
PR: The lending climate has shifted considerably over the past couple of years. How would you characterise the current appetite among lenders for landlord and investor business, and what are the main factors shaping it?
SC: There are lots of moving parts in today’s market and that makes good broker advice especially valuable. Lender appetite remains strong and the market is highly competitive, which gives brokers and landlords considerable choice.
Higher and sometimes volatile funding costs are influencing pricing and product selection, with more interest in shorter-term fixed rates and trackers as landlords look for a balance between flexibility and certainty. That should not automatically be seen as an intention to leave the market because in many cases, landlords are choosing an option best suited to current conditions and planning to reassess later.
There will also be significant mortgage maturity volumes during 2027 and we may see some landlords using further advances to re-invest, most likely improving portfolios in light of the new standards they need to achieve.
PR: Many landlords are looking to restructure, refinance or grow their portfolios through limited companies and more complex structures. What should they be considering, and how is the lending market responding?
SC: Limited company ownership is now an established part of buy-to-let, particularly among newer landlords entering the market with a clear business plan.
Holding a rental property in a limited company isn’t going to be the right route for everyone however, it really does depend on individual circumstances. We always say that anyone considering incorporation or restructuring should take professional tax and legal advice beforehand, with the financing considered alongside the wider costs and long-term implications.
One of these long-term implications is how limited company structures tie into succession.
Some established landlords may want to realise value from portfolios they have built over many years, others might want to pass on some or all of their portfolios on to children, for example. That’s important as we need the next generation of landlords picking up the baton because millions of people rely on rented homes and will continue to do so in future.
PR: Development finance remains a key route for adding new supply and refurbishing existing stock. What are you seeing in this space, and what do developers and investors need to have in place to secure funding?
SC: Paragon has expertise across development finance and buy-to-let, so there is an opportunity for our teams to work together where a customer’s plans cross those areas.
For brokers, it is worth discussing the intended exit early rather than treating the development facility as an isolated transaction. A clear plan, credible costings, appropriate experience and a realistic route to repayment or term finance will all be important.
Something we’re seeing more of is some developers choosing to keep hold of completed properties rather than sell every unit. That creates a need to think about funding as a connected process, from the initial development through to a longer-term rental strategy.
PR: What are the most common mistakes or blind spots you see landlords make when it comes to financing their portfolios?
SC: Landlords are generally entrepreneurial and understand what they want to achieve. The potential blind spot is not always being aware of the full range of funding options available or considering the whole plan at the outset.
A property might require short-term finance for acquisition and improvement before moving onto a term mortgage. An existing portfolio may need capital raising, staggered refinancing or funding for energy-efficiency upgrades as part of the forthcoming MEES regulations.
Looking at each transaction separately can mean opportunities are missed. Brokers play an important role by understanding the landlord’s broader strategy and identifying lenders that can support more than one stage of it.
PR: Looking ahead, what is Paragon focused on over the next 12 months, and what would you most like landlords and brokers to know about how you can support them?
SC: Our focus is to broaden the scope of what we can support while continuing to build on the specialist buy-to-let expertise we’re known for. We know that the brokers we work with closely like what we do and how we do it, but we want to show more brokers how we’re evolving.
Part of that is getting applications through faster and generally being more efficient but we also want to provide more connected funding solutions for brokers and their clients. That ranges from property acquisition and improvement through to long-term letting, including bridging, tailored buy-to-let and support for property upgrades.
I joined Paragon because it has strong foundations, deep specialist knowledge and long-standing intermediary relationships, but also a clear ambition to keep evolving. My priority is to make sure more brokers understand the breadth of cases we can consider and feel confident bringing us both straightforward business and proposals that require a more tailored approach.
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