At the UK Finance annual Buy-to-Let Conference, one of the key topics will be how landlords? business strategies are evolving to accommodate changing regulation.

Given the seismic shifts in regulation in the Private Rented Sector (PRS) in recent years - from buy-to-let tax changes to PRA underwriting standards, not to mention the wide range of tenant-focused legislation now coming through - it's a great time to take stock.

There are already some clear impacts: landlords are buying fewer properties, they have polarised into two groups (one group with modest portfolios, one with more substantial property interests), and many have taken steps to improve yield - yet still more have implemented changes to minimise costs.

Fewer house purchases, more remortgaging

The number of buy-to-let mortgages for house purchase has tailed off significantly since the announcement of tax changes in 2015 and is now 42 per cent lower in 2018 compared to  2015.

However, interest rates have never been lower, encouraging more landlords to remortgage and cut their finance costs as one way to mitigate higher tax and regulatory costs.

As a result, remortgaging has increased sharply. Our own mortgage intermediary study, for example, shows that remortgages have grown from 30 per cent of advisers? buy-to-let business in Q2 2015 to 52 per cent in Q2 this year.

Professional landlords go for growth

Within the landlord population, a small but resolute group continue to make prudent additions to their portfolios.

At 15 per cent of the landlord population - almost one in seven - these growth-minded individuals plan to purchase an average of 2.3 rental properties over the next 12 months according to recent research from BVA BDRC.

What we?re seeing though is growth is increasingly concentrated amongst those with larger and more complex property portfolios.

At Paragon, for example, the proportion of complex landlord business has grown from 45 per cent to 82 per cent of completions between 2016 and 2019, with landlords in this group buying property at twice the rate of landlords in general.

Landlord incorporation

More landlords are looking at incorporation, especially for new purchases.

Incorporation has the potential for lower costs as it allows some landlords to expense their finance costs against rent before the deduction of tax. In addition, the corporation tax rate is currently a flat 19 per cent compared with the basic, higher and additional personal tax rates of 20, 40 and 45 per cent respectively.

The most recent research suggests that over half of landlords (53 per cent) intend to purchase their next rental property within a limited company structure. For landlords with more than 11properties, this is even higher at 69 per cent.

Rising rents and property reconfigurations

Finally, as costs mount for landlords, pressure to raise rents has increased and the search for yield has become more intense, with more landlords looking for opportunities to develop the yield potential of both their new and already-owned properties through upgrades or reconfiguration.

Each of these different strategies show a landlord population doing their utmost to adapt to a very challenging set of circumstances, with lenders in turn developing products and services to meet their changing needs. With no sign of regulatory pressure abating, innovation will become ever more critical - so get ready for a lively debate at UK Finance's Buy-to-Let Conference!