BTL has never truly been a straightforward market. There have always been layers of complexity from property type and tenant profile through to how the borrowing is structured and what is within a landlord’s portfolio.
For some landlord purchases/remortgages, they can still be defined as ‘vanilla’ cases that might meet the tick-box criteria of more ‘mainstream’ BTL lenders. But for a large and growing number, complexity isn’t the exception, it’s the standard.
That’s where specialist lenders like ourselves have always made their mark, delivering solutions that go beyond the ‘vanilla’ and supporting brokers in placing deals others can’t.
Today, we’re seeing that specialist focus come into sharper demand than perhaps ever before, particularly in an environment where tenant demand is still large, there aren’t enough properties, and landlords also have to cover themselves even further in terms of yield and profitability.
With brokers’ help and knowledge, landlord borrowers are making much more strategic decisions — remortgaging to release equity, incorporating into limited companies, and actively seeking out those higher-yielding, more complex investments. They’re looking at HMOs, short term lets, flats above commercial units, and mixed-use properties, to name just a few. I suspect much of the equity being released via portfolios is being channelled into specialist purchases.
That certainly reflects what we’re seeing in our own data. Foundation Home Loans’ most recent Pegasus Insight research found that 62% of landlords now own at least one property through a limited company, and nearly 80% of all new BTL purchase applications are being submitted via corporate structures.
These aren’t marginal figures, they’re the defining shape of the market. And they underline just how essential it is for brokers to be equipped to handle more complex cases with confidence.
That’s exactly why we’ve recently made a number of enhancements to our complex BTL product range. We’ve introduced new lower LTV options, cut rates across key areas, and streamlined our fee structures. But what matters most is what those products are designed to do.
For example, our Property Plus offering is tailored to cases that sit just outside standard criteria, that is flats above or adjacent to commercial, ex-local authority stock, corporate lets etc.
They’re often exactly the type of properties we see landlords increasingly opting to pursue. Strong investments with solid yield potential, but which require a lender willing to look beyond surface-level criteria.
We also have HMO Plus which picks up where that leaves off, catering to properties with up to six beds or occupants, whether let on a single AST or multiple tenancies. These are again increasingly popular with professional landlords chasing higher rental income and we can offer this because we understand exactly how to assess and price those risks properly.
Short Term Lets Plus is a direct response to landlords diversifying their strategies.
Whether they’re letting out holiday homes, city apartments, or using platforms like Airbnb, this product gives them the ability to run short-term lets without the need for a standard tenancy, while still having affordability assessed using conventional AST models. It’s flexible, but it’s structured.
And finally, mixed use provides solutions for properties that combine residential and commercial space, whether that’s flats above retail, buildings with attached storage, or office units.
We’ve reduced the product fee across all variants, added new fixed rates at 60% LTV, and sharpened pricing on our existing two-year 75% LTV option.
As far as we’re concerned, this is the result of one thing: a far greater interest and demand for specialist BTL. But the broker is the enabler. You’re the one who identifies the nuance in the case, aligns it with the right lender, and explains the structure to the client.
These aren’t necessarily simple cases and that’s precisely why brokers play such a critical role in delivering them successfully. It’s about understanding how a flat above a shop might be viewed, how short-term lets are stress tested, how HMO licensing or tenancy types affect the deal.
Notwithstanding the landlord borrower’s own financial status and portfolio position. It’s technical knowledge, but it’s also commercial acumen and it’s what sets the best brokers apart.
For those already active in this space, the opportunity is growing. For those yet to make their mark, now is the time to stretch your reach.
Build relationships with lenders who underwrite manually. Understand the details of their criteria. Get familiar with the types of properties landlords are increasingly targeting.
Because the reality is, complexity isn’t going anywhere. If anything, it’s becoming the norm. And the brokers who embrace that are going to be the ones who thrive.
