Landlords facing rising costs and major regulatory change are being offered a new short-term finance option as specialist lender Somo launches its Landlord’s Breathing Space Loan. The product arrives months before the Renters’ Rights Act 2025 takes effect in England, reshaping tenancy rules, eviction routes and rent controls.
Designed for buy-to-let investors under pressure, the loan aims to provide time and liquidity while landlords adjust portfolios, refinance or exit in a market shaped by higher interest rates and tighter regulation.
Buy-to-let reform pressure and landlord cash flow risk
From May, the Renters’ Rights Act will bring one of the biggest shifts the private rented sector has seen in decades. Section 21 no-fault evictions will be abolished, fixed-term tenancies will end in favour of assured periodic tenancies, and new limits will apply to rent in advance and rent increases.
Alongside these structural changes, landlords are dealing with elevated borrowing costs, rising maintenance bills and uncertainty ahead of the Autumn Budget 2025. According to UK Finance data, average buy-to-let mortgage rates remain well above pre-2022 levels, squeezing net yields for highly leveraged investors.
Industry bodies including the NRLA have repeatedly warned that reduced flexibility and higher compliance costs are already influencing landlord behaviour, particularly among portfolio owners reassessing property standards, debt levels and long-term returns.
How Somo’s Breathing Space Loan works for landlords
Somo’s new product is positioned as a stabiliser rather than a growth tool. The lender says it is designed to help landlords manage short-term disruption without being forced into rushed sales or unfavourable refinancing.
Key features include loans from £25,000 up to £3 million, with up to 24 months of no monthly payments, regardless of credit status. Decisions are based on the property asset and borrower circumstances rather than traditional credit scoring, with approvals promised in as little as 30 minutes.
Funds can be used to clear arrears, complete refurbishments, upgrade properties to meet evolving standards, or simply support cash flow during a period of change. Exit routes include refinance, sale or transition into a longer-term buy-to-let or bridging product once conditions stabilise.
Jade Keval, sales director at Somo, said the timing reflected growing strain across the sector. “As the tenancy landscape changes dramatically, many landlords find themselves squeezed. Between rising costs, regulatory pressure and tighter yields, our Breathing Space Loan gives them the time, flexibility and liquidity to stabilise, adapt and plan ahead, without panic or rushed decisions,” she said.
Budget uncertainty and strategic options for investors
Tax policy is also weighing on landlord sentiment. A planned 2% increase in property income tax rates from April 2027, alongside the introduction of a so-called mansion tax for certain high-value homes, has added another layer of uncertainty for investors modelling future returns.
Against that backdrop, short-term liquidity products are increasingly being used as strategic tools rather than last-resort finance. Brokers report growing demand from landlords looking to reposition portfolios, delay disposals, or invest selectively in upgrades before committing to longer-term borrowing.
For some, this may mean buying time until borrowing costs ease. For others, it is about creating an orderly exit from assets that no longer stack up under the new rules.
Editor’s view
Somo’s move underlines a wider shift in the buy-to-let market: flexibility now carries a premium. As reforms narrow landlords’ room for manoeuvre, access to time – and cash – is becoming a strategic asset in its own right. The real test will be whether short-term breathing space turns into long-term confidence, or simply delays hard decisions investors will eventually have to make.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance
Published: 28 January 2026
Sources: Somo; UK Government (Renters’ Rights Act 2025); UK Finance; NRLA
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