‘The Government is trying to kill buy-to-let – but I won't stop buying properties’

MayKa0003317 - Floyd Robinson is a buy to let landlord who is happy with his investments in property across Bournemouth and Poole, Dorset and is looking to grow his portfolio.©Russell Sach - 0771 882 6138 - Russell Sach
MayKa0003317 - Floyd Robinson is a buy to let landlord who is happy with his investments in property across Bournemouth and Poole, Dorset and is looking to grow his portfolio.©Russell Sach - 0771 882 6138 - Russell Sach

Thanks to stricter regulations, diminished tax reliefs and rising borrowing costs, many buy-to-let investors are suffering.

But it's not all doom and gloom. Despite a great many headwinds, there are a number of landlords with zero intention of abandoning their investments, determined to ride out the storm.

They shared their secrets to becoming a happy, successful landlord with Telegraph Money.

Trevor Whiting, 63, first invested in bricks and mortar more than two decades ago when he bought two buy-to-let flats in Hastings.

“At the time I was trying to diversify my pension planning and I let them out successfully for about eight years,” he says.

“I sold them just before the financial crash and they had increased in value nicely. I had a 25pc deposit mortgage on each so when they sold it was a good investment.”

He fell back into the buy-to-let market 15 years later as an “accidental” landlord following a divorce, letting out a new-build buy-to-let flat in Dorset. But much has changed since Whiting’s first investment.

MayKa0003330 Your Money Pix show buy-to-let landlord Trevor Whiting at home near Weymouth, Dorset Pix Jay Williams 15-03-23 - JAY WILLIAMS
MayKa0003330 Your Money Pix show buy-to-let landlord Trevor Whiting at home near Weymouth, Dorset Pix Jay Williams 15-03-23 - JAY WILLIAMS

Mortgage interest tax relief was gradually phased out between 2017-18 and 2020-21, a policy which has cost landlords an estimated £796m this financial year, alone, according to forecasts from the Office for Budget Responsibility, the official forecaster.

Landlords have felt the absence of the relief even more keenly since mortgage rates began to rise at the end of 2021. Typical buy-to-let borrowing costs more than doubled throughout last year and remain inflated despite recent interest rate falls.

But investors who locked in competitive rates while they had the chance have sheltered their profit margins from turmoil in the mortgage market. Whiting remortgaged at 2.29pc last year and locked in the rate for five years.

'Lock into a cheap deal when you can'

“My buy-to-let doesn’t earn a fortune but it’s doing very well for me. There are certainly risks in the sector and it does seem smaller landlords are being set upon in favour of larger investors," he says.

“But I don’t have plans to sell and it’s a huge part of my pension plan.”

Whiting, a professional musician, credits his successful approach to picking the right tenants.

“My advice would be to ensure you are confident the prospective tenants are the right fit for the property. Prioritise this over any rental earning capacity,” he adds.

“It is also important to maintain good communications with tenants. Despite my rental property being very new, it has had a few minor plumbing issues.

“When tenants contact me about these, I attend to the issues quickly and if possible the same day. My tenants know that I take my side of the contract seriously and this helps maintain a good relationship.”

It is a belief shared by Floyd Robinson, a 32-year-old landlord from Bournemouth. He first broke into the buy-to-let sector as an accidental landlord in his mid-20s when he bought his ex out of the property they shared.

MayKa0003317 - Floyd Robinson is a buy to let landlord who is happy with his investments in property across Bournemouth and Poole, Dorset and is looking to grow his portfolio.©Russell Sach - 0771 882 6138 - Russell Sach
MayKa0003317 - Floyd Robinson is a buy to let landlord who is happy with his investments in property across Bournemouth and Poole, Dorset and is looking to grow his portfolio.©Russell Sach - 0771 882 6138 - Russell Sach

“I needed help paying the mortgage and rented out the spare rooms,” he says. “I like to think of myself as a good judge of character and investing in choosing the right tenants and a decent vetting process has been absolutely vital.”

He now owns three properties, rented to young professionals as houses in multiple occupation (HMO), and is looking to add a fourth to his portfolio. So confident is Robinson in the business model that he and his wife live in one of the properties shared with tenants.

“I became a landlord accidentally, but I am keen to invest more. I really enjoy it and it’s a great way to meet new people," he says.

“Some people find HMOs can be quite transient, but that is not my experience. All my tenants have been there more than a year and I always make sure existing tenants meet any potential new tenants before signing anything. I respect their decision even if it’s not the same as my own.”

Robinson makes a couple of hundred pounds per room after expenses and was fortunate to lock in five-year fixed mortgage rates at roughly 3pc on his properties before they soared. The average five-year rate now exceeds 5.5pc.

He bought his first home with funds from a stocks and shares Isa, into which his father had encouraged him to invest £200 each month from an early age. But he has no plans to return to the stock market.

“I don’t feel particularly comfortable with the stock market, but know where I am with property," he says.

'Reinvest to stay ahead of red tape'

One of the most costly policy changes faced by landlords is proposed changes to the minimum Energy Performance Certificate rating in rental properties. Government rules will require newly rented properties to have an EPC rating of C or above, up from the current minimum of E, by 2025 and existing tenancies will have to be upgraded by 2028.

The exact deadlines and rules are yet to be confirmed – much to the frustration of landlords – although a £10,000 cap on upgrades per property is reportedly being considered.

Energy efficiency is a challenge landlord Nicola Bass tackles head on – but not because of any looming legal requirements.

“If landlords have properties with an E rating they should have acted a long time ago. It’s not fair to have tenants in properties that are not energy efficient and cold,” she says.

The 52-year-old invests in cheaper properties in need of renovation, refurbishes and overhauls their EPC by installing new insulation and windows. The new legislation is on her radar, but not a concern.

Bass pays herself roughly £800 a month from her four properties in the South West, alongside income from her job as a tutor. The remaining rental income is reinvested back into the properties.

“I am happy with the income, it’s not huge but I used to be a teacher so never had a big salary.

“I invested in buy-to-let for the monthly income and will sell the properties when I retire, but I’ve also done it to provide an affordable housing solution in the local area,” she says.

The former teacher first invested in the buy-to-let sector four years ago in Plymouth.

She now rents out to both employed tenants and those receiving benefits and works with a charity to accommodate young adults who have recently left the care system.

“I make sure my rents are below market level, local prices have risen to a ridiculous level," she says.

“There have been some steep learning curves in the past with tenants, but you negotiate a solution and you learn from it.”