Investing in, and renting out, property has grown more challenging in recent years amid rising tax burdens and shifting policy. The surge in mortgage rates in the wake of the mini-budget was yet another challenge for landlords to grapple with, and though mortgage rates are falling, the years of 1% or 2% mortgage rates appear to be over for now.

Despite this, the new lending landscape will provide ample opportunities for landlords with optimal portfolios and – crucially - the right financing in place. Every portfolio is different, but we see two compelling reasons to invest during the coming market cycle.

Rising yields

The first is rising yields. UK house prices have declined for three of the last four months and values are likely to continue to soften through next year, though there will be significant variation by region. Meanwhile rents are rising amid a shortage of stock. Across the UK, rents will climb 20.5% by 2026, according to Knight Frank forecasts.

These are long-term trends, but their impacts are already being felt. Investors able to take a long view could see significant benefits.

Improving products

Secondly, though mortgage rates are higher than they were a year ago, conditions are improving. Lenders that left the market in the wake of the mini-budget are now returning with innovative products and plans to build market share through the new year.

At the time of writing, variable rate products could be found as low as 0.45% over base rate. Many have no repayment charges, opening up the opportunity to profit from lower variable rates while waiting for fixed rate products to fall further.

Other new products now available include mortgages with deferred interest payments – some lenders allow 1% of the rate to be added to the end of the term, boosting how much investors can borrow.

Whatever your investing strategy, it’s likely we have information that could benefit you. Knight Frank Finance know more than 200 lenders, including specialist buy-to-let institutions, so set up a free consultation with one of our experts today to see what's possible. We’d love to help you.