How to future proof your property portfolio 
 
The changes in mortgage products, house prices and buyer sentiment in the final months of this year 
(2022) have caused many investors and landlords to reassess their portfolios or future purchases. 
Lender stress tests are stricter than ever, interest rates on the rise and house prices expected to drop 
which is making many reassess their options. But this is not all doom and gloom, with any market change 
or time of uncertainty there is opportunity in abundance. 
 
Over the last few months, we have personally seen through our work and on Rightmove investment 
properties hitting the market as some long-term landlords offload their stock as they venture into new 
investments or plan for retirement. Unfortunately, we are also seeing some people being forced to sell 
their homes due to the rising cost of living at a time when demand is slowing which will result in selling 
below market value if they need a quick sale. These properties offer opportunity for investors who have 
cash readily available and a long-term view on property. The capital gains tax reduction for 2nd properties 
which will take effect from April 2023 which sees capital gains allowance halved will see landlords offload 
properties before that deadline to save on tax. 
 
If you are one of those investors who has a portfolio or is still looking to invest into 2023, there are few 
things you can do to help future proof your portfolio and navigate these times. 
 
Rent reviews 
When was the last time you reviewed the rent on your properties? Inflation currently sits at 11% which 
has increased the cost of all goods and services in the UK. Rent should be no different. As your 
mortgage payments will increase and the cost of labour to fix any maintenance issues you should check 
your rents to make sure your rents are in line with this increase. You should also check the rents 
achieved by similar properties within your location also to see how your rent compares to similar 
properties. 
 
Run stress test calculations 
Whether you are buying with a mortgage or refinancing with a mortgage, you should check that the rent 
you currently receive or expect to receive is enough to satisfy the lenders stress test calculation. How 
you hold the property e.g., ltd company or own name, the loan size, rent received, and your tax banding 
will determine how much you can afford to borrow. So, if you are pricing up a deal or a refinance, best to 
check yourself first to see if the rent you receive can facilitate that lending. If the rent isnt enough you 
may need to pass on that deal, if the rent isn't far from the amount you need, can you increase the rent to 
hit that target? To run a stress test calculation, use the calculator here: 
https://www.themortgageworks.co.uk/calculators/how-much-can-be-borrowed-calculator. 
 
Review your properties 
Do you have underperforming properties within your portfolio? Do you have properties that don’t 
cashflow very well? Or properties with lots of maintenance issues? Problem tenants or very little capital 
growth? These properties can be a drain on your time, effort, and resources. You may benefit from 
selling these properties to free up capital to reinvest elsewhere or fund your lifestyle. Similarly, if you 
have properties performing well, can you invest in more properties like those? Or you could change 
these properties into HMOs or serviced accommodation to increase their cashflow as opposed to 
standard family lets. 
 
Review your mortgages 
If you currently have mortgages on your properties, running a health check on these could lead to a large 
saving. Whether that be finding a new fixed rate after you moved onto the variable rate or switching to a 
different type of mortgage altogether e.g., repayment to interest only. Or from a fixed rate to a variable 
rate. 
 
Review your strategy 
Have you typically stuck to family lets and not considered any other type of strategy? Rising interest 
rates and stagnating mean family lets aren’t bringing the returns they were in previous years. To increase 
cashflow for investment properties many investors are turning their attention to HMOs (houses multiple 
occupancy) and serviced accommodation (Airbnb for example) in which tenants pay for week per room 
generating much more income. We are seeing a huge increase in enquiries for HMOs and Serviced 
accommodation as landlords look to maximise their income from their investments. 
 
EPC changes coming in 2025 
Now the changes to EPC regulation hasn’t been confirmed but it has been heavily hinted by the 
government over the past few years. The expected change is to see all let properties hold an EPC rating 
of C and above by 2025. How the Government will enforce this is to be seen but with this potential 
change on the horizon it makes sense for landlords and investors to start to think about this possible 
change and to make improvements to their current properties. Not only will the changes help your 
properties to comply with the regulation changes but also make your properties more attractive to 
prospective tenants. 
The best way to prepare for these changes would be to consider the EPC rating of a property when you 
purchase it in the first place, the second opportunity would be if you are completing a renovation of the 
property before your first tenant moves in. So, when you are modernising the property for the tenant, you 
can also turn your attention to EPC rating as well as the cosmetics. For example, whilst the property is 
empty and being refurbished you could insulate the loft or replace the boiler. 
 
In all markets there is always opportunities to find property deals and if property is a long-term 
investment for you time is on your side that will allow you to ride out any market turbulence. If you have 
any mortgage queries or would like to review your portfolio, please get in touch. 
 
01482 205084 
info@greenandgreen.net 
 
This content will only be shown when viewing the full post. Click on this text to edit it. 
Tagged as: Buy to Let, Investing
Share this post:

Leave a comment: 

Our site uses cookies. For more information, see our cookie policy. Accept cookies and close
Reject cookies Manage settings