We are currently 90 days away from the most significant structural shift in the UK private rented sector since 1988.
On 1 May 2026, the Renters’ Rights Act officially moves from a legislative threat to an operational reality. The headline is simple: the end of fixed-term tenancies and the total abolition of Section 21 "no-fault" evictions.
While the consumer press is focused on the Bank of England's recent 5-4 deadlock to hold the Base Rate at 3.75%, the smart money is looking at the "Verification Wall" appearing in the mortgage market. The Times and Savills have both noted that lenders are already pricing in the "churn risk" of a market where every tenant is periodic from day one.
In this environment, a mortgage is no longer just a loan; it is a seal of approval on your management capability. If you are a portfolio landlord, the question isn't whether you can afford the rate, but whether your assets are "mortgageable" under a regime where vacant possession is never guaranteed.
As we move into the spring, a distinct "funding gap" is opening between mainstream and specialist lending. UK Finance data indicates that over 75% of new buy-to-let applications are now flowing through Limited Company structures. This isn't just for tax efficiency; it's a defensive play. In a periodic-tenancy world, lenders view a corporate borrower as having a more robust "business continuity" plan than an individual.
However, even corporate borrowers are hitting the "Security of Tenure" hurdle. Surveyors from Knight Frank and JLL are increasingly applying a "liquidity haircut" to property valuations. If a surveyor believes a property will take 12 months to reclaim via the new Section 8 court process rather than 6 months via the old Section 21, they trim the valuation. This is the "Hidden Friction" of 2026: a 75% LTV application can suddenly become a 65% LTV reality at the final hour.
The real driver of higher rates for complex cases in 2026 isn't the Base Rate—it's Basel 3.1. Lenders are now forced to hold significantly more capital against loans where the "exit" (possession) is legally complex.
The most dangerous assumption right now is that existing mortgages are "safe" until the fixed rate ends. Many mortgage deeds contain clauses regarding "Tenancy Type." On May 1st, when all ASTs automatically convert to periodic, you could technically be in breach of your original contract if your lender hasn't updated their policy. Furthermore, many fail to realize that mortgage underwriting has changed to include a "Digital Footprint" check via the new National Landlord Database. If your property isn't registered there by the time of your remortgage, the system will trigger an automatic decline.
At this stage, most successful borrowers involve a specialist like Willow Private Finance to sense-check the case before it reaches another credit committee.
We bridge the gap between your financial reality and the lender's 2026 algorithm. Our approach is forensic—we don't just find a rate; we audit your "Compliance Readiness" for the May 1st transition. We have direct lines into specialist funders who have already "baked in" the periodic tenancy risk, allowing us to bypass the conservative haircuts applied by high-street valuers.
We leverage whole-of-market access to find "Green Lanes" for energy-efficient properties and "Business-Case Underwriting" for those with complex income. In a market where the rules are rewritten monthly, we provide the technical precision required to move with confidence.
How does the National Landlord Database impact my 2026 remortgage?
In 2026, the database is a mandatory underwriting tool. Lenders use it to verify that you are a "Fit and Proper" landlord and that your property meets the Decent Homes Standard. If there is a discrepancy—such as an expired gas safety certificate or an unresolved Ombudsman ruling—the lender’s system will flag the case as "High Risk," often leading to an immediate rejection or a significant hike in the offered rate.
Is it still possible to secure 75% LTV on a periodic tenancy?
Yes, but the pool of lenders is shrinking. High-street banks are increasingly capping LTVs at 65% for properties with rolling monthly contracts to mitigate "Churn Risk." Specialist lenders still offer 75%, but they require a higher Interest Coverage Ratio (ICR), often stress-tested at 6% or higher, to ensure you can survive a two-month void period should a tenant choose to leave with the new statutory two-month notice.
Why are surveyors "haircutting" valuations for properties with sitting tenants?
Since the abolition of Section 21, the time required to regain possession of a property has doubled. Surveyors must account for the "marketability" of an asset; a house that is currently let on a periodic basis is less attractive to a residential buyer than one with vacant possession. This "Occupational Drag" is currently resulting in valuation discounts of 5%–10% in areas with low rental demand.
What is a "Section 8 War Chest," and why do I need one?
Lenders now want to see evidence of liquidity. A "War Chest" is a set-aside fund (usually 3–6 months' rent) that proves you can handle the legal costs and potential arrears associated with a contested Section 8 eviction. Having this documented in your business plan can significantly improve your credit score with specialist lenders in 2026.
How do the new 2026 EPC rules affect my portfolio's equity?
Properties rated 'D' or 'E' are seeing "Equity Erosion." Because lenders are charging higher rates for non-green properties, the "yield-to-debt" ratio is worse, which in turn lowers the investment value of the asset. Upgrading to a 'C' rating is no longer just about compliance; it is a prerequisite for accessing the most competitive 2026 financing rates.
The window to secure "Pre-Act" terms is closing. If you have debt maturing in 2026 or a portfolio needing professionalization, the time to act is now. Let's review your financing architecture before the May 1st deadline reshapes the landscape permanently.
Author: Wesley Ranger
Wesley Ranger, founder of Willow Private Finance, is a strategist who views property debt through the lens of macro-economics. With over two decades in the industry, he specializes in structuring complex debt for HNW individuals and professional landlords who require more than just an off-the-shelf solution.
Important Notice
This article is provided for general information purposes only and does not constitute personal financial or mortgage advice. Mortgage suitability, affordability assessments, lender criteria, documentation requirements, and product availability depend on individual circumstances and may change at any time. Remortgaging decisions should take into account not only interest rates, but also regulatory requirements, income verification standards, and the risk of changes to personal or financial circumstances. You should always seek tailored, regulated advice before entering into, changing, or redeeming a mortgage. Willow Private Finance Ltd is authorised and regulated by the Financial Conduct Authority (FCA No. 588422). Registered in England and Wales.
