"The current landscape is an ideal time to assist your investor clients by equipping them with the finance solutions they need to capitalise on these opportunities. "
It easy to get caught up in the negative press about property investment. Landlords have faced a barrage of increased regulation, higher taxation and more expensive buy-to-let mortgages in recent years – fuelling an array of downbeat column inches.
However, the fundamental dynamic of supply and demand continues to support the resilience of an investment in residential property. According to the Zoopla Rental Market Report, since the pandemic, rental costs have risen by 27%, with the last year alone posting a 3.9% increase. While this growth varies regionally — ranging from 1.3% in London to 11.9% in areas like Rochdale — the overall trend is clear: demand is outstripping supply, and this imbalance is forecasted to push rental costs up by another 4% on average during 2025.
Despite this rental market growth, the downbeat coverage of property investment is driving a shift amongst landlords. The latest English Private Landlord Survey 2024 says that 31% of landlords are planning to reduce the size of their portfolios in the next two years. While this does not necessarily mean they are exiting the market entirely, it indicates that a significant number of rental-ready properties will be available. For investors looking to grow their portfolios or enter the market, this creates a compelling opportunity to secure high-demand properties.
For brokers, it’s time to ignore the negativity and focus on the opportunity. The current landscape is an ideal time to assist your investor clients by equipping them with the finance solutions they need to capitalise on these opportunities. In a market where speed and flexibility are often critical, bridging finance is an invaluable solution. It allows investors to act quickly to secure properties and provides the flexibility to refurbish or reposition assets before transitioning to longer-term financing.
Bridging finance is particularly useful for those looking to expand their portfolios in a competitive environment. The flexibility to acquire and improve properties rapidly is key when demand for rental accommodation is so high. Additionally, for first-time investors, it offers a way to establish a track record and gain experience managing rental properties, which is an important step toward accessing longer-term funding options.
The upward trajectory of rental demand and costs indicates that occupancy rates are likely to remain strong, providing an attractive environment for property investment. For those investors who recognise the potential in this market, brokers can empower them with the funding they need to act decisively.
At Castle Trust Bank, we have long championed the voice of property investors, who play a crucial role in meeting the country’s housing needs and we continue to work in collaboration with brokers to deliver product innovations and tailored financial solutions that give brokers the tools they need to unlock opportunities for their clients.
As we look ahead to 2025, the combination of rising rental costs, strong demand, and a steady pipeline of available properties presents an environment ripe with potential for growth. With the right financial tools, brokers and their clients can turn these opportunities into tangible success.
