Buy-to-Let Watch Episode 9 | In the latest instalment of our series, Buy to Let Watch, we take a closer look at how specialist buy-to-let lenders support advisers when cases become more complex. This follows on from Episode 8, where we explored why lenders were optimistic in their efforts to stabilise the market during 2023.
Navigating challenging buy-to-let mortgage cases often requires a more strategic and creative approach. Many landlords faced shifting criteria and tighter affordability standards in 2023, prompting brokers to explore solutions beyond mainstream lenders. This is where specialist BTL lenders play a vital role, offering flexible criteria and a willingness to work with clients who fall outside traditional parameters.
For advisers working with limited company buy-to-let clients, large HMOs, multi-unit blocks, holiday lets, or structures involving overseas ownership, a specialist lender’s expertise can become essential. Their ability to assess non-standard income, complex portfolios and unusual property types gives brokers options that would otherwise be unavailable.
Buy to Let Watch Episode 9 highlights how successful placements rely on deep knowledge of the specialist lending market. Identifying the right provider for each scenario is key, especially when dealing with flats with deck access, properties above commercial units such as takeaways, or cases involving sitting tenants that may complicate repossession risk.
Specialised Lenders: A Key Resource for 2023 Market Challenges
In situations that require a more nuanced lending approach, advisers often turn to lenders who specialise in assessing unique, mission-driven cases. Providers such as Unity Trust Bank focus on supporting unconventional property types, charitable organisations, and social-purpose lending, offering tailored underwriting that aligns with the needs of diverse clients.
To further support advisers, Connect provides access to a full range of specialist buy-to-let lenders through our expert buy-to-let mortgage support. For broader guidance on lender criteria and market news, explore our latest landlord market insights.
Working with packagers or master brokers can help you find solutions you may not have been aware of
Working with packagers and master brokers can uncover buy-to-let solutions that many advisers may not initially consider. In one recent case, we reviewed a shared accommodation property with four tenants. Although the setup involved multiple occupants, it did not meet the threshold for a mandatory House in Multiple Occupation (HMO) licence under local authority rules. On paper, mainstream lenders such as Accord or Santander could have been suitable options based on the property type alone.
However, the case became more complex. The property included internal bedroom locks, and each tenant held their own Assured Shorthold Tenancy (AST) agreement. In 2023, many high-street buy-to-let lenders were reluctant to accept this kind of arrangement because it resembled a quasi-HMO structure, even though it did not require a licence.
This is where specialist support became invaluable. By working with Fleet through a packager channel, we were able to secure a product that recognised the unique setup. Instead of applying higher HMO pricing, Fleet offered standard, lower Buy-to-Let rates, providing the landlord with a much more cost-effective solution.
Situations like this demonstrate the value of partnering with experienced packagers who understand specialist buy-to-let lending, particularly when properties fall outside the traditional mould. Their knowledge can help brokers access alternative products, navigate unusual tenancy arrangements, and secure funding options that might otherwise be missed.
For advisers supporting similar cases, exploring broader lending routes can deliver more flexibility and tailored results for clients.
Strengthening Relationships to Navigate the 2023 Buy-to-Let Market
Building strong relationships remains one of the most effective ways to navigate the complexities of the 2023 buy-to-let mortgage landscape. At Connect, our offices benefit from a dedicated Fleet underwriter, giving advisers direct access to expertise that helps secure more challenging applications. Working closely with underwriters and Business Development Managers allows brokers better to understand BTL criteria, workflow, and lender expectations. This insight enables advisers to strategically position client applications and increase the likelihood of approval in a fast-moving market.
Working With Specialist Lenders in a Complex BTL Environment
Specialist lenders continue to play a vital role in limited company buy-to-let mortgages, portfolio cases, and large HMO mortgage projects. These cases typically involve complex income structures, layered company ownership, or intricate property details. Ensuring lenders receive fully detailed financials, rental projections, and supporting documents helps them assess risks accurately and make more informed lending decisions.
Advisers looking for guidance with complex cases can refer clients to our expert buy-to-let mortgage support, where we assist with sourcing and structuring specialist applications.
The Rising Demand for Capital Raising in 2023
One of the most notable shifts in the 2023 market is the rise in capital raising for property improvements. Landlords are increasingly preparing for upcoming regulatory changes, including Energy Performance Certificate (EPC) requirements and proposals outlined in the government’s Reforming the Private Rented Sector report. As a result, brokers are seeing more inquiries from landlords seeking funds for upgrades, refurbishments, and long-term property improvements.
Challenges of Capital Raising in a High-Rate Environment
Despite growing demand, capital raising has become more challenging due to higher interest rates and tighter rental affordability assessments. Many existing loans now fall short of stress-test requirements, making additional borrowing increasingly difficult. Successful outcomes in today’s conditions require detailed financial planning and an adviser who understands the evolving landscape of BTL affordability, stress testing, and portfolio lending.
Insights from Buy to Let Watch – Episode 9
Episode 9 highlights the value of strong relationships with lender partners and how they can help advisers navigate stricter criteria. More lenders are reintroducing income-based buy-to-let options and top-slicing, which can support clients whose rental income alone does not meet affordability metrics.
However, for landlords needing to raise capital while tied into a fixed-rate product, a buy-to-let second-charge mortgage may offer a viable alternative. These solutions allow landlords to access funds without disturbing their existing mortgage, helping them move forward with improvements or portfolio plans.
Second Charge Finance in the Buy-to-Let Market
The 2023 buy-to-let market has seen steady demand for second-charge borrowing, especially among landlords who need flexible capital without disturbing their first mortgage. While the second-charge landscape is broader on the residential side, only a select group of lenders actively supports BTL second charges. Key names such as Central Trust, Together, and West One continue to stand out thanks to their adaptable criteria and willingness to consider income-based affordability solutions for landlords.
Why Second Charges Can Be Challenging
Securing a second charge on a rental property can be complex. The process typically requires consent from the first-charge lender, and it is often here that obstacles arise. Many existing lenders either refuse consent or impose strict limitations, particularly when the overall borrowing against the property is relatively low. This creates a barrier for landlords trying to release equity or raise funds for portfolio expansion.
Equitable Charges as an Alternative Route
Some specialist second-charge lenders offer a more flexible option via an equitable charge. Unlike traditional second charges, an equitable charge does not require consent from the first-charge lender. This gives landlords additional avenues to secure funding, especially when time-sensitive opportunities arise or when the first-charge lender’s restrictions would otherwise block progress.
This approach has proven especially useful when lenders face atypical rental properties, flats with deck access, units positioned above takeaway businesses, or other scenarios that fall outside mainstream criteria. These cases highlight the importance of lenders who understand the unique challenges of the BTL sector.
The Value of Specialist Support
For advisers unfamiliar with second charges or handling complex BTL mortgage situations, working alongside specialist packagers or master brokers can be essential. These experts often reveal solutions or lender options that standard sourcing systems may miss. Their insight can simplify complex transactions and help landlords secure funding aligned with their investment plans.
If you need structured support or wish to explore lender options for these types of cases, visit our expert buy-to-let mortgage support page for guidance on sourcing and case placement.
Why Adviser Collaboration Matters
Navigating the second-charge market in 2023 requires a blend of sector knowledge, creative thinking, and persistence. Proactive engagement with lenders and industry partners helps advisers deliver better outcomes for their landlord clients.
Strengthening relationships through our network also provides access to lender updates, training, and case support. If you’re looking to enhance your proposition or need backing on specialist cases, consider joining our community through our Connect broker network page.
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FAQ – Second Charge Mortgages
| Question | Answer |
|---|---|
| What is a second charge mortgage? | A second charge mortgage lets a landlord borrow against their property without changing the existing first mortgage. |
| Why are BTL second charges harder to secure? | Fewer lenders operate in this space, and many first-charge lenders restrict or refuse consent, limiting borrowing options. |
| What is an equitable charge? | An equitable charge is an alternative form of security that does not require consent from the first-charge lender. |
| Which lenders offer BTL second charges? | Specialist lenders such as Central Trust, Together, and West One commonly offer BTL second-charge lending. |
| Can I get a second charge on a complex property? | Yes. Some lenders will consider properties like flats with deck access or units above takeaway shops. |
| Does a second charge affect my first mortgage? | Traditional second charges require first-charge consent, but equitable charges allow the first mortgage to remain untouched. |
| When should landlords consider a second charge? | When remortgaging is costly, early repayment charges apply, or a landlord needs to raise funds quickly. |
| Do I need a specialist broker for second charges? | Yes. Packagers and master brokers can access lenders and options not visible on standard sourcing systems. |
| How long does a BTL second charge take? | Completion can be quicker than a remortgage, especially when an equitable charge is used. |
| Can second charges help expand a property portfolio? | Yes. Many landlords use second charge borrowing to fund new purchases or refurbishments. |