Buy-to-Let Watch Episode 02 | In the previous episode, we discussed the idea of “Market Trends for Brokers” and how sentiment can shape landlord decision-making. In this instalment, the focus shifts to choosing lenders wisely and understanding the funding routes available to portfolio landlords.

Many professional landlords are committed to expanding their property holdings, yet accessing the finance needed for new purchases is not always straightforward. Deposit shortages and affordability constraints often create barriers. As a result, a growing number of landlords are using their existing properties to raise capital for future investment.

One of the most effective strategies is to identify properties with strong potential for capital growth, particularly those suited to refurbishment or permitted development. Improving a property can help landlords release equity, which can then be redirected into new acquisitions. The three main routes for raising capital are remortgaging, securing a further advance, or obtaining a second charge loan.

Five-year fixed-rate products continue to attract strong interest from landlords. These products provide predictable payments and can support affordability across the full mortgage term. Even landlords who do not rely on affordability advantages often choose five-year fixes because they offer greater stability and lower exposure to market fluctuations.

However, remortgaging is not without challenges. Many fixed-rate products carry early-repayment charges, which can significantly affect the overall cost of refinancing. Some lenders, such as Godiva, offer five-year fixed rates without early repayment charges, giving landlords additional flexibility. Others, including Precise and Foundation, limit their early repayment charges to the first three years of the term, which can make refinancing more accessible.

Despite these options, capital raising through remortgaging can still be expensive. Portfolio landlords must compare fees, charges, timescales, and long-term financial impact before choosing a route. For those who want to retain an existing rate or avoid penalty charges, further advances or second-charge loans can offer a practical alternative with fewer upfront costs.

As the UK buy-to-let market continues to evolve, staying informed about product developments and lender criteria is vital. Understanding the full range of financial tools available enables landlords to grow their portfolios and manage borrowing more effectively strategically. With the right guidance, advisers can help landlords navigate the complexities of raising capital and make confident decisions about their investment plans.

Collaborative Approaches in Property Finance

Second charge borrowing relies heavily on cooperation between lenders, and the process often begins with the client’s main buy-to-let lender. High street providers remain central to this, as many are willing to approve further advances or give consent for a second charge to be added. Well-known lenders such as BMS and TMW continue to offer additional borrowing options, keeping them competitive for landlords seeking extra flexibility.

Specialist lenders take a different approach. Our review of 13 specialist providers shows considerable variation in how they support further advances and second-charge loans. Kent Reliance is currently the only specialist lender consistently offering both options, highlighting the diversity within this part of the market and the need for tailored solutions when advising investors.

These differences reinforce the value of collaborative decision-making between lenders, advisers, and landlords. Investors exploring second charge finance must understand each lender’s criteria, especially in a buy-to-let environment where policies vary widely. Working with an experienced broker ensures clients receive clear guidance and can select the most suitable second-charge or further-advance option for their property strategy.

Limited options for further advances in buy-to-let investment

Accessing further advances remains a challenge for many landlords, as only a small number of lenders currently offer this facility. At present, Aldermore and Paragon will consider further advance requests, although they do not permit second charges, which restricts flexibility for investors who may need to raise capital later. In contrast, Precise and Foundation allow second charges but do not provide further advances, creating distinct sets of limitations for clients.

Recent market feedback suggests that around 70% of lenders offer neither option. This lack of flexibility can significantly affect a landlord’s ability to raise funds after completing a purchase. Understanding these variations in criteria is essential when planning long-term borrowing strategies in the buy-to-let sector.

Consider a scenario where a landlord intends to release capital two years after completing a purchase. If an adviser recommends a five-year fixed rate with early repayment charges from a lender that does not support further advances or second charges, the client may struggle to access funds when needed. This could result in additional costs, such as early repayment penalties or remortgaging sooner than expected.

These situations underline the importance of advisers addressing long-term investment plans during the recommendation process. Clear conversations about borrowing constraints can help landlords make informed decisions and avoid unexpected obstacles in the future. Keeping detailed notes of these discussions is equally important to ensure transparency and demonstrate that all relevant risks and limitations were explained.

Failure to record these conversations may expose advisers to potential complaints if a landlord later encounters borrowing issues. Maintaining accurate documentation protects both the adviser and the client, supports compliance requirements, and enhances the quality of advice in a market where lending criteria continue to evolve.

The role of specialist lenders in the buy-to-let market

As we wrap up Buy to Let Watch Episode 2, it is clear that specialist lenders continue to shape the direction of the UK buy to let market. Their flexible criteria and tailored underwriting give landlords access to solutions that are not usually available through mainstream lenders. For advisers supporting clients with complex needs, this sector remains invaluable.

Specialist lenders broaden the opportunities available to investors by offering products designed for scenarios such as multi-unit properties, HMOs, and clients with non-standard income. Their willingness to look at cases individually helps portfolio landlords structure their investments more efficiently and adapt to changing market conditions. For more information, explore our HMO Mortgages Guide page.

Even with these strengths, advisers must consider the limitations that can accompany specialist lending. Some buy-to-let providers do not currently permit further advances or second charge borrowing, which can restrict landlords hoping to release equity or support expansion plans. Highlighting this to lenders and encouraging more flexible policies could help meet growing demand across the sector.

The adaptability of specialist lenders is one of their greatest advantages. By recognising the diverse needs of modern landlords, they support sustainable portfolio growth and give advisers more ways to match the right product to the right client. This level of flexibility is particularly valuable when navigating a market influenced by shifting yields, affordability pressures, and regional rental trends.

However, advisers must continue to assess product restrictions when making recommendations. Understanding whether a lender offers further advances or allows second charge lending is essential when creating long-term strategies for portfolio clients. Addressing these gaps would strengthen the appeal of specialist lenders and improve outcomes for landlords.

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