Following last month’s launch of Landbay’s Premier BTL products into the Scottish market, the lender spoke with a broker to discuss the sector, landlord borrower needs, and what having a new lender active north of the border will mean to advisers and their landlord clients.
After a successful initial phased access via Openwork firms, Chloe Collins, director — mortgage and protection adviser at Melrose Wemyss Associates — who are members of Openwork — sat down with Landbay to discuss the new offering.
How would you describe the current state of the Scottish BTL market, and where are you seeing the main strengths?
The Scottish BTL market continues to play a very important role within the wider housing system, particularly in cities such as Glasgow and Edinburgh where demand for rental homes remains extremely strong. What stands out most is that tenant demand still comfortably exceeds supply in many areas, which means good quality rental property remains in high demand.
Over recent years the market has changed slightly in terms of the type of landlords operating within it, but that change has arguably created a more stable and professional environment.
Where once there were more ‘accidental landlords’, today we are seeing far more experienced investors who approach the market with a long-term strategy and a clear understanding of their portfolios.
What types of landlord clients are most active in Scotland at the moment?
Most of the activity I see now comes from professional landlords who are operating through limited company structures. It has become extremely common, and I honestly cannot remember the last time I arranged a new BTL purchase in someone’s personal name.
Limited company ownership has become the norm for investors who are building or managing portfolios. These clients are typically well-informed and have clear plans about how they want their portfolios to grow, whether that involves refinancing existing properties, raising capital to invest again, or gradually expanding their holdings in the areas they know well.
Are you still seeing appetite for expansion, or is the market mostly about remortgaging existing properties?
There is still a strong level of remortgage activity, and in my own business that probably represents around 80% of cases at the moment, with the remaining 20% being purchases. However, what is encouraging is that many remortgage cases are linked to further investment.
A number of landlords are releasing equity at sensible LTV levels with the intention of purchasing another property. They may be taking a slightly more measured approach than they did a few years ago, but the ambition to grow portfolios is definitely still there when the right opportunities present themselves.
Why does Scotland continue to offer opportunity for landlord borrowers despite the well-known challenges?
The most important factor is the continuing demand for rental homes. In many areas there is a shortage of social housing, which means private landlords play a crucial role in providing accommodation for people who need it. That demand is unlikely to disappear, and it gives the sector a solid foundation even when there are policy or taxation challenges.
Of course landlords must consider factors such as the Additional Dwelling Supplement and the overall cost of investing, but ultimately the need for rental housing remains strong. For advisers, that means there is still a clear opportunity to support landlords who want to invest responsibly and make well-structured decisions about their borrowing.
How important is lender choice for brokers and landlord clients in Scotland?
Lender choice is extremely important because BTL is not simply about selecting the lowest rate. Every case is different, and landlords often value different things within a product. Some may prioritise a lower interest rate even if it means paying a higher fee, while others may prefer a smaller fee or incentives such as free valuations or legal support.
The right option depends on the landlord’s strategy, the property value, and how the borrowing fits within their wider portfolio. Having a wider choice of lenders — and having Landbay is a welcome addition to the options we have — allows advisers to tailor solutions properly.
What is positive about another lender such as Landbay offering BTL products in Scotland?
It is very positive to see another lender offering a dedicated range of products for Scottish landlords because greater choice benefits both brokers and clients. Scotland has its own characteristics as a market, and lenders who recognise that and provide flexible product structures can make a real difference.
Landbay’s approach, with a range that includes different fee options and incentives, gives advisers more flexibility when sourcing solutions for clients. It is also encouraging to see support for limited company borrowers and professional landlords, because that reflects how the market has evolved in recent years.
Which product features matter most to Scottish landlords at the moment?
Flexibility is probably the most important factor. Landlords want options when it comes to fees, incentives and product structure because no two cases are exactly the same. A varied fee structure is particularly helpful, especially where investors are working with lower-value properties and need to keep upfront costs manageable.
Incentives such as free valuations or assisted legal work can also make a big difference when landlords are refinancing multiple properties, as those costs can quickly add up. Having products that recognise these needs helps brokers present more realistic and workable options to their clients.
What is your outlook for the Scottish BTL market over the next year?
The sector will continue to evolve, but the underlying demand for rental housing means it will remain resilient. Professional landlords are still active, advisers are helping them navigate a more detailed lending landscape, and lenders who are prepared to support the market will find opportunities.
From that perspective, the arrival of additional lender choice through ranges such as Landbay’s Premier products is a welcome development, because it helps ensure brokers and their landlord clients have the tools and options they need to continue investing in Scotland’s private rental sector.
