Buy-to-Let Watch Episode 7 | Following the insights shared in Buy-to-Let Watch Episode 6, where we explored the importance of investor strategy, this latest update, Buy-to-Let Watch Episode 7 | Market Insights for Landlords, offers further guidance for landlords and brokers navigating the evolving buy-to-let landscape.
As discussed across our Buy to Let insights, energy efficiency remains a growing concern for landlords. Although the proposed EPC changes were still under consultation in 2021, the government signalled its intention to require all newly let properties to achieve a minimum EPC rating of C by 2025, with existing tenancies expected to follow by 2028.
While these standards had not yet been confirmed, early preparation was already proving beneficial. Improving EPC ratings can increase long-term rental appeal, reduce tenant energy costs and protect property values in a competitive market. For landlords reviewing their portfolios, this forms an important part of maintaining strong rental performance and meeting future regulatory expectations.
We also saw a shift in lender behaviour emerging throughout 2021. Some lenders began offering green mortgage incentives to support landlords upgrading their properties, while others showed reduced appetite for lending on homes with lower EPC ratings. This early market movement highlighted the importance of forward planning, particularly for investors seeking to refinance or expand their portfolio.
If these trends continue, properties with poor energy performance risk becoming harder to finance and potentially decreasing in value. Landlords who act early in aligning their portfolios with expected EPC standards are likely to be better positioned for future regulatory changes and lender requirements.
For more support on navigating market shifts, brokers can explore our mortgage network services or access our specialist mortgage guide.
Some lenders are declining loans for low-EPC properties
In 2021, several lenders began tightening criteria around rental properties with low Energy Performance Certificate ratings. As a result, some Buy to Let applications were declined where the EPC fell below acceptable standards. For property investors, this created both barriers and opportunities.
Lower-priced properties in need of improvement often offered strong potential returns, especially when investors could upgrade the EPC rating through targeted renovation work. Energy-efficient improvements not only increase a property’s value but also strengthen its long-term rental appeal. However, securing a traditional Buy to Let mortgage was often difficult when a property required substantial refurbishment or was classed as non-mortgageable at the point of purchase.
Using Refurbishment Bridging Loans to Support EPC Upgrades
For investors purchasing homes that required improvement, refurbishment bridging finance provided a practical alternative. This form of short-term borrowing allowed buyers to complete essential works, improve the EPC rating and bring the property up to a mortgageable standard. After renovations, many investors were able to refinance onto a long-term Buy to Let product.
To explore how these solutions work, you can review our page on bridging finance guide for more guidance.
Key Challenges When Using Bridge Finance
Despite being an effective strategy, refurbishment bridging loans required careful planning. Investors typically needed a substantial deposit at the outset and enough capital to fund the renovation works. Without access to these funds, progressing with the project could become difficult.
Another challenge in 2021 came from Buy-to-Let lender restrictions on remortgaging. Many lenders continued to apply the six-month ownership rule, which prevented refinancing until the property had been owned for 6 months. This often meant investors remained on higher-cost bridging finance for longer than expected, reducing potential profit margins. Any delays in the renovation schedule or a lower-than-expected post-works valuation could further complicate the transition onto a Buy to Let mortgage.
For more information on long-term lending options, refer to our remortgage your rental propertypage.
Planning to Maximise Investment Success
To manage these challenges effectively, investors needed strong preparation and financial oversight. Creating an accurate budget that included the purchase price, renovation costs and all associated fees was essential. Researching lender criteria and understanding refinancing timelines helped investors choose realistic funding options and avoid unnecessary delays.
Those seeking additional guidance or case-placement support could benefit from working with a specialist network. You can learn more through our Specialist Packaging for Brokers, which provide tailored assistance for brokers advising property investors.
A Strategic Approach to Low-EPC Property Investment
With the right strategy in place, refurbishment bridging finance enabled investors to purchase properties competitively, add value through EPC improvements, and access long-term Buy to Let solutions once the renovation work was complete. By planning ahead and understanding the risks involved, property investors were better positioned to take advantage of opportunities in the evolving 2021 mortgage market.
A welcome development for many brokers and landlords would be the return of earlier product types, particularly retention buy to let options, which once played a valuable role in supporting long-term client planning.
Growing Innovation in 2021: The Rise of Bridge-to-Let Solutions
In 2021, the UK property finance market began shifting noticeably as more lenders introduced bridge-to-let products. These solutions offered property investors greater flexibility at a time when refurbishment opportunities and short-term acquisitions were increasing. By combining the immediate accessibility of bridging finance with the stability of a buy to let mortgage, these hybrid models addressed several common challenges faced by landlords and developers.
Octane Finance: Expanding Beyond Bridging
Previously known solely as a specialist bridging lender, Octane Finance broadened its offering with the launch of a new buy to let mortgage designed specifically for customers transitioning from short-term finance.
Key features of the product in 2021 included:
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Loan terms of up to five years, offering short-to-medium-term flexibility.
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Up to 75 percent of the purchase price available from day one, giving investors strong leverage when acquiring or refurbishing properties.
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A pre-agreed buy to let term loan waiting at the end of the bridge, ensuring a smooth transition following renovation work.
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Use of the same valuer and solicitor for both stages, significantly speeding up the process and reducing duplication.
This structure proved particularly helpful for expatriate landlords and investors working on refurbishment projects, allowing them to move quickly while benefiting from secure exit routes.
Precise Mortgages: Strengthening Refurbishment BTL
Precise Mortgages also made a notable impact in 2021 with its refurbishment buy to let product, which resolved one of the biggest investor frustrations: uncertainty around post-works valuations.
Their approach included:
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Two valuations completed on day one – one based on the property’s current condition, and one based on the planned works.
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A fast re-inspection upon completion of the refurbishment, avoiding the need for a full second valuation.
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Two mortgage offers issued simultaneously, meaning the customer could progress without unnecessary delays or repeated underwriting.
This proactive framework gave investors far more confidence around costs, timelines and future rental calculations.
A Positive Direction for Landlords and Property Investors
The increasing availability of bridge-to-let and refurbishment BTL options in 2021 represented a positive shift for UK property investors. These lender innovations offered:
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Faster transitions from purchase to long-term financing
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Reduced valuation risks
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Streamlined legal and underwriting processes
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Improved support for refurbishment and short-term projects
As lenders such as Octane and Precise continued to diversify their product ranges, investors gained access to more efficient, flexible and predictable financing pathways.
Many lenders now have incentives for borrowers who bring their properties up to the required EPC standard
As long as the work is completed within six months, the investor can complete the BTL offer as soon as they are ready, giving them a guaranteed bridge exit route.
As per the table below, a few other lenders offer this product type. It is worth noting that BTL lenders are open to allowing a remortgage to them after works have been completed without applying the six-month rule and providing solutions for, say, cash buyers.
This is a snapshot of some of the products available as of 21/03/22
What would be really good to see is a return of some of the past products like retention BTL. Rather than using bridge finance, a term BTL was offered on day one with a ‘retention’ for the difference in value due to the work needed. The retention was released as soon as the work was done and evidenced.
We understand that some lenders already plan to offer more options like this, which is great. However, as the new EPC rules approach, we will need as much innovation as possible.
Episode 7 reinforces that, despite economic fluctuations, the buy to let market continues to evolve with pockets of strong opportunity. Whether your clients are purchasing, remortgaging or restructuring their portfolios, informed guidance remains essential.
Stay tuned for the next instalment of Buy to Let Watch, where we continue to track trends, policy changes and market movements affecting landlords and advisers across the UK.
Thank you for reading our publication on “Buy-to-Let Watch Episode 7 | Market Insights for Landlords. Stay “Connect“-ed for more updates soon!
FAQ Bridge-to-Let & Refurbishment BTL
| Frequently Asked Question | Answer |
|---|---|
| What is a bridge-to-let product? | A bridge-to-let product combines short-term bridging finance with a pre-agreed buy to let mortgage, allowing investors to refurbish a property and then transition smoothly onto a term loan. |
| Why were bridge-to-let options popular in 2021? | Due to competitive property prices and increased refurbishment opportunities, investors needed fast access to funds and a guaranteed exit strategy, making bridge-to-let solutions highly attractive. |
| How did Octane Finance evolve its lending in 2021? | Octane expanded from bridge-only lending to introduce a five-year buy to let product, offering up to 75 percent day-one funding and shared valuation and legal work across both lending stages. |
| What benefits did Octane’s dual-product structure offer? | Investors gained faster completions, a secure exit route, reduced duplication of professional fees and improved flexibility for refurbishment and expat borrowers. |
| What is a refurbishment BTL mortgage? | A refurbishment BTL mortgage supports properties needing works before being mortgage-ready. Lenders assess the current value and future value based on planned improvements. |
| How did Precise Mortgages improve refurbishment lending in 2021? | Precise conducted two valuations at the start of the application and issued two mortgage offers simultaneously, reducing uncertainty and speeding up post-works refinancing. |
| Why are double valuations useful for investors? | They provide clarity on expected post-renovation value, helping investors plan budgets, calculate rental yields and secure mortgage terms before refurbishment begins. |
| Who benefits most from bridge-to-let products? | Portfolio landlords, property developers, expat investors and individuals purchasing properties below market value or in need of refurbishment benefit significantly from these products. |
| Do bridge-to-let products reduce risk? | Yes. By pre-agreeing the exit BTL mortgage and streamlining legal and valuation processes, lenders reduce the risk of borrowers becoming stuck with short-term finance. |
| Are refurbishment BTL products suitable for first-time landlords? | They can be, provided the applicant has a clear works schedule, strong financial profile and realistic rental projections. Many lenders prefer some landlord or refurbishment experience. |