The Intermediary – September 2025 - Flipbook - Page 42
BUY-TO-LET
In focus
Landlord borrowers
are going it alone
T
here’s always a lot of
noise around the buyto-let (BTL) market
– regulation, taxation,
costs, the Renters’
Rights Bill, etcetera
– but it is important to look beyond
this, as advisers. Certainly, within our
latest Pegasus Insight Landlord Trends
research, there appears to be plenty to
data to support a growing number of
landlord borrower opportunities that
can be acted on immediately.
For me, one statistic stands out
above all others: more than a quarter
of landlords with buy-to-let borrowing
went direct to a lender for their most
recent mortgage. 20% of them did this
without any advice at all.
That’s not a marginal figure. In a
market where margins maer and
rates are moving, this represents a
substantial population of landlords
who may not be on the most suitable
deal, may be paying more than they
need to, and may not have the right
product structure for their long-term
investment plans. For advisers, it’s an
open invitation to start a conversation.
The timing could hardly be beer.
Product rates have been falling
in recent months, with lenders
competing harder for business and
broadening their criteria. The choice
of products is improving, too.
At Fleet, we’ve recently launched
our 55% loan-to-value (LTV) range,
complementing our established
portfolio and limited company
offerings, as well as mortgages for
houses in multiple occupation (HMOs)
and multi-unit freehold blocks
(MUFBs), and we’ve made changes
right across our range to provide more
competitive rates and flexibility.
Seizing opportunity
When you put the current product
environment together with the
behaviour we’re seeing in the landlord
population, the opportunity for
advisers is clear.
40
The Intermediary | September 2025
Six in 10 leveraged landlords have
had a fixed-rate end in the past two
years. More than two-thirds of them
stayed with their existing lender, and
of those doing a product transfer, 43%
went direct.
That means they were probably not
presented with any alternative from
what’s available across the market,
certainly not by an advisers, and
may not know what else could work
beer for them.
Looking ahead, 40% of landlords
with borrowing intend to refinance
in the next 12 months, with an
average of 2.4 loans each. Among
portfolio landlords with four or more
mortgages, that figure rises to 53%,
refinancing an average of three loans.
That’s a significant pipeline of
refinance business for those advisers
who are proactive in identifying and
engaging clients before they roll onto
a reversionary rate or accept whatever
their lender offers.
The research also shines a light on
the limited company sector. One in
five leveraged landlords already has
a mortgage on a property held in a
limited company, and 81% of landlords
with at least one limited company
property have borrowing.
Yet 72% of these landlords said they
didn’t know which lenders were active
in the limited company space. That
lack of awareness is an opening for
advisers to add value, particularly as
63% of those planning to buy in the
next year intend to purchase via a
limited company structure.
While the purchase market
is more muted, with just 6% of
landlords overall planning to buy,
those that have such intentions are
overwhelmingly reliant on mortgage
funding, with 60% using a mortgage
to at least part-fund the purchase.
For the right client, lower rates,
greater choice, and targeted product
innovation can make the numbers
work for acquisitions that might have
been shelved last year.
WES REGIS
is national account manager
at Fleet Mortgages
Time for conversation
Another detail worth noting is the
debt profile of today’s landlord. The
average leveraged landlord owes
£673,000, with an average LTV of
around 49%.
Many are paying significant sums
in annual mortgage interest – £22,000
on average, or £40,000 for portfolio
landlords – which means even modest
improvements in rate or structure can
translate into substantial cashflow
gains. That’s a compelling case for an
advisory review and a conversation
about refinancing, especially in a
falling rate environment.
What’s also interesting is how
landlords choose their lender when
rate isn’t the deciding factor. Across
the board, minimal fees, overpayment
flexibility, and service quality and
speed are top priorities.
This clearly plays to the strengths
of advisers who can match clients
to products that not only offer a
competitive rate but also meet their
operational needs, whether that’s
freeing up cashflow, enabling earlier
repayment, or ensuring fast execution
on a purchase.
The buy-to-let market will always
have its challenges, but right now,
advisers are in a strong position to
demonstrate their worth. Rates are
beer, product choice is improving,
and the data shows a high level of
unadvised borrowing activity.
For every landlord who has
gone direct in the past, there’s an
opportunity to show them the benefits
of full-market advice and tailored
product selection.
If you’ve been looking for a positive
in the current environment, this is it.
The unadvised landlord borrower is a
significant growth opportunity, and
the conditions are right to act now. ●
