The UK property market is shifting. According to property expert Jamie Williams, the days of casual, part-time buy-to-let landlords are coming to an end – and that’s not a bad thing.

As tighter regulation, reduced tax relief, and rising compliance requirements push hobbyist investors out, professional landlords are increasingly dominating the market. This, Williams says, is creating demand for flexible, tailored finance products. “With interest rates still high and tax rates rising, there’s no question that the golden age of buy-to-let is over for the hobbyist investor.

However, serious and experienced landlords are building smart, sustainable portfolios. They have a longer-term outlook, better tenant management, and a stronger understanding of risk compared to someone just renting out an old flat.

This is a net positive – it removes froth from the market, creates more consistent demand for specialist lenders, and pushes innovation in finance products that serve the real needs of property businesses today.”

Market data and trends

According to UK Finance, the number of new buy-to-let mortgages fell from 25,280 in Q4 2022 to 12,422 in Q1 2024 – a 53% drop in just over a year.

Meanwhile, specialist brokers such as Pure Property Finance report rising demand for portfolio finance, development finance, and bridging loans, especially among landlords with multiple properties.  “We’re moving away from the one-man-band landlord toward a more corporate, strategic approach,” says Williams.

“This creates new financing needs – from development exit loans to complex portfolio refinancing – and that’s where specialist lenders thrive.”

Opportunities for lenders and brokers

Williams sees the shift as a chance to refocus on higher-value clients who are likely to reinvest, refinance, or scale up. He also highlights the opportunity to support landlords with financial education and strategic planning:  “Finance products can now be better aligned with evolving landlord profiles and portfolios, including ESG-linked loans and bespoke underwriting. The market shake-up is an opportunity, not a crisis.”

Agreement from Lord Best

Speaking at a meeting of The Letting Industry Council, Lord Best said that, in his view, the days of the amateur landlord have gone, especially after the Renters Rights Bill bans Section 21 in the matter of evictions, where specialist help should always be sought, else there is a real danger of a failed eviction coupled with considerable costs.