Specialist lender Somo has reported a sharp rise in demand for its recently launched Landlord’s Breathing Space Loan, as landlords look to manage cashflow pressures and avoid forced disposals amid higher borrowing costs and regulatory change.
According to early application data, over 65% of enquiries since launch have come from landlords facing imminent refinancing challenges.
The remaining enquiries relate to properties requiring compliance upgrades, refurbishment works or support with arrears.
The product offers terms of up to 24 months with no monthly payments and is positioned as a short-term stabilisation tool for landlords navigating the impact of the Renters’ Rights Act 2025, rising buy-to-let mortgage costs and tightening rental margins.
Somo has also commissioned independent research in partnership with Landlord Knowledge to assess landlord sentiment, financial pressures and investment intentions in what it describes as a post-reform rental market.
The findings are due to be published next month and, the lender says, will inform future product development and broker support.
Jade Keval (pictured), sales director at Somo, says: “The level of interest has been exceptional and it tells a powerful story about what’s happening in the rental market.
“Landlords aren’t rushing for the exits, they’re looking for time and flexibility while they adjust to reform, refinancing pressure and higher costs.
“Breathing Space gives them exactly that: liquidity without the monthly strain, and the freedom to make strategic decisions rather than distressed ones.”
CASE STUDY
Somo pointed to the example of a North West portfolio landlord with eight buy-to-lets whose fixed-rate mortgages had expired earlier this year.
Refinancing at higher rates would have materially reduced cashflow, while two properties required energy-efficiency upgrades in response to the Renters’ Rights Act 2025.
A recent void period had also resulted in short-term arrears, tightening affordability under mainstream rental stress testing.
Somo structured a £412,000 Landlord’s Breathing Space Loan secured against two properties. The 18-month facility carries no monthly payments for the full term and was designed to address refinancing pressure, clear arrears and fund compliance works.
The lender said the deal was assessed primarily on asset value and exit strategy rather than strict rental stress metrics.
Completion is expected this month, providing the borrower with 18 months of servicing relief to undertake upgrades and refinance in what are hoped to be more favourable conditions.
The Breathing Space Loan is available from £25,000 to £3 million, with underwriting focused on asset value and exit strategy rather than credit scoring alone. Somo said this provides brokers with an additional option for portfolio stabilisation during a period of market adjustment.
Keval adds: “In a volatile market, time is the most valuable asset a landlord can have.”
