The UK's buy-to-let mortgage market is dividing sharply, with thousands of small landlords heading for the exit even as professional property investors expand, but RBC Capital Markets sees OSB Group PLC (LSE:OSB) as one that sits on the right side of that divide.
The broader picture is uncomfortable: surveys suggest nearly a third of landlords plan to reduce their portfolios and around one in six are considering selling up entirely within two years, squeezed by higher mortgage costs, tax changes, and the Renters' Rights Act, which abolishes no-fault evictions and adds new compliance burdens.
Yet RBC Capital Markets argues this exodus is precisely what makes OSB's position attractive, as properties consolidate from amateur hands into professional portfolios – the segment OSB almost exclusively serves, with around 90% of its book lent to limited companies and multi-property landlords.
The specialist lender, which holds around 24% of the specialist BTL market and is the largest of its kind in the UK, hosted an investor day this week at which RBC took away an impression of "underlying operational business momentum."
The bank forecasts the specialist BTL market growing from £70 billion to £95 billion by 2029, driven by the housing shortage, affordability pressures on first-time buyers, and intergenerational wealth transfer into property.
RBC rates OSB an 'outperform' with a price target of 800p, against a current share price of around 550p.