The Intermediary – May 2025 - Flipbook - Page 16
S E C O N D C H A RG E
In focus
Second charge
BTL – a little
known solution
I
magine this: one of your
customers, a landlord with a
large portfolio, is looking to
raise the finances needed to
bring a property up to Energy
Performance Certificate
(EPC) standard. What product do you
recommend to them?
The go-to for many brokers might
be a standard remortgage, but there’s
a lesser-known alternative that could
serve this customer beer: a second
charge buy-to-let (BTL) mortgage.
Second charge BTL loans are not
offered by all lenders, and so are oen
overlooked. However, they present
a compelling option for landlords
looking to unlock equity in their
existing properties without disturbing
the terms of their current mortgage.
For clients who have favourable
interest rates or terms on their first
charge, a second charge allows them
to retain those benefits while securing
the funds they need.
In a challenging and ever-changing
market, landlords are navigating
increasing regulation, rising
taxation, tighter profit margins, and
unpredictable interest rates. Yet many
are not retreating – they are evolving.
Research we conducted revealed
that, although around one in 10
landlords are planning to reduce the
size of their portfolios this year, nearly
30% are actively planning to expand or
diversify. This shows that the appetite
for growth remains strong, even
amid market pressures. For landlords
with ambitions to grow or diversify
their portfolios, traditional financing
methods don’t always provide the
flexibility or speed required.
Second charge BTL mortgages
are increasingly filling that gap,
offering a solution that aligns with the
evolving needs of property investors.
Whether it’s funding refurbishments,
14
The Intermediary | May 2025
MICHELLE WALSH
is head of intermediaries
at Together
upgrading properties to meet new
regulations, or consolidating debt
to ease cashflow, these loans provide
landlords with the agility they need to
act quickly and strategically.
Bespoke and agile
One of the key advantages of second
charge BTL mortgages is the speed at
which they can oen be processed.
Compared to remortgaging, second
charge applications oen move faster
due to more responsive underwriting
and fewer hurdles.
They also offer flexibility and
can be purpose-built to meet a wide
range of financial objectives – from
property improvements and EPC
upgrades to business expansion, debt
consolidation, or even providing
a deposit for the purchase of
additional properties.
They are particularly valuable when
the funds are to be used for specific
improvements, such as bringing a
property up to EPC standards – a
requirement that’s becoming more
critical as legislation tightens.
The flexibility of repayment
terms, whether short-term or longterm, also makes them accessible to
landlords at various stages of their
property journey.
Those newer to the market, who
may be facing cashflow constraints or
are reluctant to refinance their main
mortgage, can still access the finance
they need without affecting their
existing financing arrangements.
Moving on opportunity
At Together, we have already seen
many customers finding success
through the product. We recently
helped a landlord unlock equity across
their portfolio with a £879,000 second
charge BTL mortgage, secured against
26 properties in a £3.5m portfolio. This
enabled them to move swily on a
new opportunity that arose, without
affecting their existing loans or
refinance each property individually.
Some lenders, like Together, also
offer cross-charging, where one
loan can be secured against multiple
properties, providing even greater
flexibility for portfolio landlords.
Despite these benefits, awareness of
second charge BTL mortgages remains
limited. Many landlords simply
don’t know they exist or understand
how they can be used. This is where
brokers play a vital role; it’s up to
industry professionals to guide their
clients through the available options,
bringing alternative lending solutions
to their aention and ensuring
customers have the right information
to make informed decisions.
As demand for flexible financing
continues to grow, brokers who
understand and champion second
charge BTL will be positioned to
thrive. These brokers are not just
facilitating transactions, they’re
building long-term relationships,
solving complex challenges, and
enabling clients to achieve their goals
with greater confidence and speed.
Second charge BTL mortgages are no
longer the niche product they used to
be – they are a strategic financial tool.
As landlords navigate the evershiing market, brokers have the
opportunity to lead with knowledge
and solutions that go beyond the
conventional.
Awareness, education and access to
specialist lenders can make the world
of difference in achieving the right
outcomes for your customers. ●
