What You Need to Know About Property Financing in 2025

2025 is shaping up to be an interesting year for UK property investors. Interest rates aren’t exactly easy to swallow, new regulations are coming in, and rental demand is shifting around the country. It’s making investors think more carefully about how they approach their strategy. It can be a minefield. The key? Getting your financing right.

As a mortgage broker working with investors across the UK, I know how the right financing strategy can make or break a deal.

Specialist Mortgage Solutions

The mortgage market these days offers way more than just standard buy-to-let options. Specialist lenders are adapting policy to give investors an edge, although there’s certainly still space for the more “vanilla” lenders to get involved.

Bridging finance* can help you secure a property quickly- often at auction or for refurb- before refinancing onto a long-term product.

Commercial mortgages* are ideal for mixed-use buildings or larger portfolios, while development finance is increasingly accessible for smaller projects.

Working with a broker ensures you can access lenders who have the appetite and desire to lend in this space.

*these enquiries would be referred to a third party.

Limited Company vs Personal Buy-to-Let

This question is one of the most common I get asked, and for good reason. Buying investment property through a limited company has surged in popularity over the last few years, largely because of changes to how mortgage interest relief is treated for individual landlords. However, limited company mortgages typically have higher rates, not all lenders offer them and there are other associated costs to be mindful of. The decision should consider both tax and lending implications - something your tax adviser or accountant can help weigh up.

Refinancing for Growth

Many investors are sitting on assets that have appreciated over the years - refinancing can be a great way to unlock some of that value and boost cash flow for future investments.

Common reasons to refinance:

· Releasing equity to fund another purchase

· Securing a better rate

· Restructuring debt to reduce monthly payments

Start the process early (at least six months before your current deal ends) to avoid slipping onto a costly variable rate. Getting ahead of the game could save you some serious money in the long run.

Niche Investments

Lately, higher-yield models like HMOs or social housing lets are landing on my desk.

While they can offer strong returns, these models come with additional regulation and lender scrutiny. Not all lenders will entertain this and criteria varies widely. A lot of investors end up buying these types of properties with cash, thinking they’ll refinance quickly. But sometimes they’ve paid a premium for the property and find they can’t get the full value back when the lender does a bricks-and-mortar valuation. A broker who can get the application in front of the right lender, and in the best light, is invaluable.

New Build and Off Plan

Off-plan property purchases involve buying a property before it's built and exchanging contracts months, sometimes years, before completion. The main advantage is that they are often sold at a discounted price, meaning you can secure a premium property below market value, with the potential for strong capital growth by the time construction is complete. Additionally, new builds generally require less maintenance and are attractive to renters.

However, they do come with risks. Delays in construction are common, you commit thousands of pounds very early on and market fluctuations can pose a risk, potentially reducing the value at the point of completion. Rejection from mainstream lenders is common, especially when the new development is heavily investor-driven. There’s also the risk that the developer could face financial trouble or fail to deliver, leaving you in a difficult position and your deposit at risk.

While off-plan purchases can be rewarding, it’s important to do your homework on the developer and the market conditions. Lean on your broker and solicitor to help navigate the risks.

Final Thoughts

2025 might be a year of challenges but it’s also full of opportunities for those who are smart about their strategy. Whether you’re expanding, refinancing, or reviewing your structure, I’d be happy to help you make confident, informed decisions.

Joanna Everett

Senior Associate Mortgage & Protection Broker