Will buy-to-let investments continue to be popular in 2022/23?

buy to let popular

At the start of the year, we predicted that there would be a high demand for buy-to-let bridging loans in 2022.

But have our predictions have turned into reality?

Will the popularity of buy-to-let investments will continue in the new financial year?

Beside from answering these questions, we will outline the ways in which we can support property investors in 2022/23 with bridging loans or buy-to-let mortgages.

House and rent prices rise

In January, we suggested that landlords could expect growth in both house and rent prices. Recent statistics have certainly proved this has been the case! There was a 1.7% month-on-month increase in house prices in March 2022. Over the past 12 months, prices rose by 14.3%. That is the fastest pace of growth since 2004.  It’s clear the success of the property market in 2021 has not yet been stifled by the cost-of-living crisis we’re watching unfold this year.

On top of this, rent prices grew by 2.3% in the year leading up to February 2022, reflecting the continuing health of the buy to let market.

Sources: ForbesNationwideONS

Encouragingly, there’s still a high demand for rental housing. In fact, according to Capital Economics, privately rented property supply will need to increase by 227,000 homes a year over the next decade to meet demand. Further, 42% of landlords reported seeing a higher demand for their properties within the last year.

Source: The GuardianMortgage Strategy

In light of the price growth and rental demand, it’s likely that buy-to-let investments will continue to increase in popularity in the 2022/23 financial year.

increase demand housing renting

Interest rates and stamp duty

We predicted that rising interest rates and stamp duty changes were some potential trends to be wary of in 2022.

As expected, The Bank of England increased interest rates to 0.75% in March 2022, the third hike since last December. This has had implications on the cost of borrowing, most notably residential mortgages.

Source: Bank of England

It was also rumoured that stamp duty for second homes could be subject to reform ahead of the Spring Statement in March. Some experts suggested the government would increase rates from 3% to 4%. While these reforms did not materialise, the government may still yet consider this as part of its post-pandemic tax agenda. Landlords might look to fast track their purchases before any reforms come into effect. This could result in a higher demand for buy-to-let mortgages and bridging loans later this year.

Source: Simply Business

Financing green renovations

In his Spring Statement, the Chancellor cut VAT on clean technology to tackle the energy bills crisis. Energy saving materials and technologies can increase a property’s sustainability and marketability. Many renters saying they would pay more for an energy efficient home, sustainable features are becoming a much more attractive investment for landlords. You can find more information on energy efficiency for buy-to-let properties here. As such, 2022/23 could see an increase in property refurbishment bridging loans as landlords look to capitalise on the reduced cost of sustainable features. Our permitted and light development finance is available for borrowers who are looking to renovate, refurbish or convert their assets, whether they’re looking to:

Source: Evening StandardEastern Daily Press

green renovations

Inflation concerns

The ONS recently put the rate of inflation at 6.2%, a 30-year high. It also predicts that inflation could hit 9% at the end of 2022. Historically, the property market has been used as a hedge against inflation, which warrants higher wages and higher rents. Consequently, the yields on a rented property could increase. Therefore, landlords might seek out bridging buy-to-let loans to expand or start developing their buy to let portfolios.

Source: ReutersMortgage Strategy

Financing buy-to-let investments

Whether buying a property, or looking to renovate one, it seems likely that buy-to-let investments will remain in high demand in 2022/23. It’s vital, therefore, that brokers and investors find the right loans to finance these investments. So, what qualities should they look for in a buy-to-let loan provider?

  1. Speed and flexibility are key
  2. Investors who can act quicky
  3. Access products tailored to their unique needs

All these qualities will have a significant advantage for a lender – and we have them all here at MFS. Plus, in April we lowered our rates across our buy-to-let-mortgage range and bridging loan products, making them more accessible for investors.

Our buy-to-let pay mortgage rates now start from 3.29%, down from 3.79%. We now also allow rolled-up monthly payments for up to nine months and deferred interest of up to 2%. You can read more on this in our buy-to-let mortgage and bridging loan product guide.

As well as this, we have extended the range for our lowest-rate residential bridging product from £100,000 to £4 million. The upper limit used to be £1.5 million. So, this change will ensure more borrowers can access the lowest-rate products.

As the new financial year unfolds, our team is on hand to help. To find out more, get in touch with our friendly team today.


MFS are a bridging loan and buy-to-let mortgage provider, not financial advisors. Therefore, Investors are encouraged to seek professional advice.

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