Established property portfolio landlords

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Landlords become portfolio landlords for a variety of different reasons. All landlords will take into account various considerations when building their portfolio. One key component is managing and operating the income and expenditure.

Landlords will treat their portfolio as a business, looking to keep their costs to a minimum and income to the maximum. Where finance is utilised, the Interest Cover Ratio (ICR) is a useful calculation to take into consideration as part of your overall financial assessment of your portfolio.

Your ICR is calculated by dividing your rental income by the interest cost paid on your finance and multiplied by 100, to arrive at your percentage. The calculation can be used to assess both individual properties and also your overall portfolio.

Example

Assume a monthly rental income of £1,000pm with a monthly finance cost of £689.65pm.

£1,000 divided by £689.65 multiplied by 100 = An ICR of 145 per cent.

UK Finance published a useful document in July 2025, providing a quarterly insight into buy-to-let lending for Q1 2025. Within the document, it detailed the average buy-to-let ICR for the UK in Q1 2025 was 202 per cent.

There are various options when looking at financing for property portfolios. The options can vary dependent upon your personal requirements. In general terms, there are three distinct funding strategies available to portfolio landlords, with each having both benefits and drawbacks.

The strategies include multiple mortgages with a number of different lenders, multiple mortgages with the same lender or one overall mortgage, for all properties from the same lender. Your mortgage adviser will be able to guide you through all the options and detail the benefits and drawbacks of each strategy.

When looking to add to your property portfolio, landlords may well look to source properties in need of refurbishment or modernisation. Where a property is in need of work you may well find that certain lenders will not consider lending, until the works have been completed. In this specific circumstance, landlords may decide to purchase with cash and look to remortgage to a lender once the works have been completed.

As an alternative method, do not underestimate the value of short-term lending for the purchase of the property, to then remortgage once the works have completed.

This option would put the landlords cashflow in a different position when compared to purchasing the same property with cash. There are now a number of lenders offering the surety of a short-term loan, coupled with an exit, of a long-term mortgage at the point of purchase.

The ability to access an up-to-date property portfolio spreadsheet should be one of a portfolio landlord’s best friends. The document can include a wide variety of information for each property within your portfolio as well as detailing when current mortgage products are due to end and capturing the EPC rating of each property.

The National Residential Landlords Association (NRLA) website is a great resource for all types of landlords including providing access to their state-of-the-art property management platform, NRLA Portfolio.

Please note lenders have different minimum criteria requirements and not all landlords and property types will qualify for this specific product. For further information contact NRLA Mortgages.

This is an advertisement only and in no way should be viewed as a personal recommendation or advice. Before a recommendation of the suitability of the product can be given, we will direct you to 3mc (UK) Limited who can provide specialist mortgage advice. As part of this they will ask questions so that they can fully understand your circumstances before giving advice.

NRLA Mortgages is a trading name of LPTE Limited which is an Introducer Appointed Representative of 3mc (UK) Limited who is Authorised and Regulated by the Financial Conduct Authority and is entered on the FS Register under reference 302992.

Please note: 3mc can advise/arrange Business Buy to Let (BBTL) and Consumer Buy to Lets (CBTL). Of the two, only Consumer Buy to Lets are regulated by the FCA.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

ANY PROPERTY USED AS SECURITY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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