How to Protect Your Liquidity When Refinancing a Portfolio

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How to Protect Your Liquidity When Refinancing a Portfolio

Refinancing is a critical moment for landlords. It can unlock equity, improve terms, or restructure debt – but it can also create liquidity risks if not managed carefully. Rising rates, tighter stress tests, and higher fees mean that cash reserves are more important than ever. Protecting liquidity during refinancing ensures that landlords remain resilient, even under pressure.

Why Liquidity Matters

Liquidity is the buffer that protects landlords against unexpected shocks. Without sufficient cash or readily available reserves, even a temporary void or rate rise can cause major problems. Lenders know this, which is why liquidity is increasingly central to underwriting decisions in commercial finance.

Liquidity Risks in Refinancing

• High redemption costs – early repayment charges or exit fees can reduce available capital.
• Reduced loan sizes – stricter stress testing may lower borrowing capacity, leaving landlords short of expected funds.
• Increased monthly payments – higher interest rates reduce free cash flow, squeezing liquidity buffers.
• Transaction costs – valuations, legal fees, and broker costs can add up, eating into reserves.

Strategies to Protect Liquidity

• Plan early – start refinancing discussions 6–12 months before loans mature to avoid forced decisions.
• Build buffers – set aside cash reserves equal to at least 3–6 months of portfolio debt service.
• Negotiate covenants – aim for realistic terms that avoid liquidity drains during temporary downturns.
• Use staggered maturities – avoid refinancing all loans at once to spread risk over time.
• Consider blended facilities – portfolio loans that balance higher-yielding assets with stable properties can provide smoother cash flow.

Practical Examples

• A landlord facing multiple loan expiries consolidates into a single commercial facility, reducing monthly outgoings and preserving liquidity.
• A portfolio owner builds a £100,000 cash buffer before refinancing, ensuring capacity to handle voids and interest rises.
• An HMO investor negotiates covenants based on portfolio-level performance, protecting liquidity despite occasional property-specific voids.

The Role of NACFB Brokers

NACFB brokers help landlords refinance strategically, balancing equity release with liquidity protection. They know which lenders are flexible on covenants, how to negotiate reserve requirements, and how to structure deals that safeguard cash flow. Their expertise ensures refinancing strengthens, rather than weakens, liquidity.

Conclusion and Takeaway

Refinancing is more than just chasing the best rate. For landlords, protecting liquidity is the foundation of resilience and long-term success. With careful planning and the guidance of an NACFB broker, refinancing can improve both terms and stability without draining reserves.

Next Steps

If you would like to explore refinancing options that protect liquidity, please complete the short form below and an NACFB member broker will be in touch.

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Published: 17 December 2025

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Landlords face tougher penalties as rent repayment orders expanded

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Property118

Landlords face tougher penalties as rent repayment orders expanded

The government has announced changes to rent repayment orders under the Renters’ Rights Act.

New changes include offences for providing false information to the Private Rented Sector (PRS) Database and knowingly or recklessly misusing a possession ground.

The news comes after the government published a list of civil financial penalties, under which landlords could be fined up to £6,000 for discriminating against those on benefits and children.

The maximum amount of rent a landlord can be ordered to repay will double from 12 to 24 months

A rent repayment order is a mechanism where a landlord who has committed an offence can be ordered to repay an amount of rent to the tenant or local authority.

The Renters’ Rights Act guidance, says the Act will extend rent repayment orders which will now include: “To the offences of knowingly or recklessly misusing a possession ground, breach of a restriction on letting or marketing a dwelling-house, continued tenancy reform breach after imposition of a financial penalty, continued breach of landlord redress scheme regulations after imposition of a financial penalty for this breach, provision of false information to the PRS Database when purporting to comply with PRS Database regulations and continued failure to register with the PRS Database after imposition of a financial penalty for this breach.”

Under the new rules, the maximum amount of rent a landlord can be ordered to repay will double from 12 to 24 months. The period in which a tenant or a council can apply for a rent repayment order after an offence has been committed will also be extended from 12 to 24 months.

Rent repayment orders will also apply to superior landlords and company directors, which the government says will “ensure criminal rent-to-rent arrangements can be properly held to account”.

Crack down on repeat offenders

The government has also announced that landlords who have previously been subject to enforcement action for an offence will be required to pay the maximum rent repayment order amount if they commit the same offence again, in a move the government say will crack down on repeat offenders.

The government guidance says: “Where a landlord has been convicted of or received a financial penalty for licensing offences or any of the relevant offences across the Act, they will be required to pay the maximum rent repayment order amount.

“This will ensure the deterrent effect is equally strong across all listed offences and that the deterrent effect is increased for the offences to which this provision did not previously apply.”

Property118 commercial reality check

Many landlords will read this and feel the ground shifting again beneath their feet. That reaction is understandable. The rules are expanding, the penalties are heavier and the margin for error is narrowing. None of this reflects badly on landlords who already act responsibly. It reflects a policy environment that increasingly assumes bad faith and then regulates accordingly.

What landlords should do next

Protect yourself against misunderstanding, not just misconduct. Keep written evidence explaining why possession grounds are used, even when the reason feels obvious. The risk now sits as much in interpretation as in behaviour.

Prepare for the PRS Database before it exists. Even though the database is not yet operational, begin aligning tenancy records, licensing details and ownership information now. When registration becomes mandatory, readiness will matter more than speed.

Clarify accountability across all arrangements. Where companies, directors or superior landlords are involved, document control and responsibility clearly. This is preparation, not admission of fault.

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