Nearly four in ten landlords with mortgages are planning to remortgage their buy-to-let properties within the next year, signalling a potentially busy period for refinancing in the private rented sector. This trend is driven largely by landlords managing larger portfolios, who are seeking to restructure borrowing amid rising costs and ongoing regulatory changes.

High refinancing activity among landlords

Research from Pegasus Insight’s latest Landlord Trends report reveals that 39% of landlords intend to remortgage within the next 12 months. The propensity to refinance is notably higher among landlords with multiple mortgages; 56% of those holding four or more mortgages plan to remortgage, compared to just 24% of landlords with one to three mortgages.

This data highlights a significant level of borrowing activity in the sector, despite concerns over regulatory pressures such as the proposed Renters Rights Act and the threat of rent controls. Landlords appear to be proactively managing their financial arrangements, seeking to optimise their borrowing structures across their portfolios.

Impact of regulatory concerns and market stability

Mark Long, founder and managing director of Pegasus Insight, commented on the findings: “While much of the recent discussion around the private rented sector has focused on the potential negative impact of the Renters Rights’ Act and the threat of future rent controls, these findings highlight the continued scale of borrowing activity taking place across the landlord market.”

He emphasised that landlords are not remaining passive but are actively refinancing and reviewing funding arrangements, which sustains demand for specialist buy-to-let lending and expert mortgage advice.

Long also pointed to the underlying stability of the sector, noting, “Tenant demand remains resilient and tenancies are often long term in nature, helping to provide landlords with relatively predictable rental income over extended periods.” This stability is a crucial factor that supports landlords’ confidence in refinancing decisions.

Complexity of buy-to-let borrowing

The research indicates that landlords planning to remortgage expect to refinance an average of 2.7 loans each. This suggests that borrowing arrangements are becoming increasingly complex, with landlords managing multiple loans across several properties. Such complexity underscores the importance of tailored financial advice and dedicated buy-to-let lending products.

Additional research from Pegasus Insight found that tenants typically remain in rented accommodation for an average of 8.2 years, including over five years in their current home. Furthermore, two thirds of tenants intend to stay in their current rented home once their existing tenancy ends. These long-term tenancies contribute to consistent rental income streams, which can provide landlords with greater financial predictability when considering remortgaging.

What this means for landlords

For landlords, especially those with larger portfolios, the current environment presents both challenges and opportunities. Rising costs and regulatory uncertainty may prompt many to review their mortgage arrangements to secure more favourable terms or to restructure debt. The resilience of tenant demand and long tenancy durations offer reassurance that rental income remains stable, supporting refinancing efforts.

Given the increasing complexity of buy-to-let borrowing, landlords should seek expert advice to navigate the refinancing process effectively. Access to specialist lenders and tailored mortgage products will be essential in managing portfolios efficiently and maintaining profitability in a changing market.

Source: Based on reporting from Property118

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