Three-quarters of brokers have seen growing demand for limited company buy-to-let products over the past year, according to new research from lending and savings software provider Finova.
The findings suggest that the buy-to-let market is rebounding, with 63% of brokers overall reporting increased demand for specialist buy-to-let. However, the data points to a widening gap between what brokers’ clients want and where lenders are focusing their investment.
While three quarters of brokers have seen an uptick in limited company borrowing, lenders appear more cautious. Almost half (45%) cite regulatory constraints as the biggest barrier to innovation in the specialist buy-to-let sector, while 41% say limited broker demand is holding them back. Among specialist lenders, that figure rises to 63%, exposing a disconnect between lender perception and broker experience.
The report, New Foundations: Building the Next Era of BTL Lending, explores the forces shaping the buy-to-let market, from product demand to technological change and appetite for innovation.
TECHNOLOGY AND MARKET CHALLENGES
More than a third of lenders (38%) identified technology challenges as a key brake on innovation, with many still reliant on legacy systems that make it difficult to respond quickly to market demand. A further 36% pointed to the volatility of swap rates as a barrier to product development, while 35% cited margin pressures and affordability concerns.
Despite these headwinds, more than three quarters (78%) of lenders – and 83% of building societies – said their appetite for innovation has increased over the past two years. Yet few are translating that enthusiasm into concrete investment. Only 15% are prioritising new product development, and just 11% are investing in faster decisioning technology.
Instead, many are focusing on improving broker portals and communication tools, with 21% of lenders directing resources into this area. Brokers, however, see the main shortfalls elsewhere: nearly half (48%) say flexibility for complex borrowers is still lacking, while 43% highlight speed of service as their biggest frustration.
BRIDGING THE GAP
Finova chief executive Gareth Richardson said: “We’re seeing a real shift in the specialist buy-to-let market, with brokers responding quickly to growing investor demand. However, the flip side is that many lenders are still playing catch-up.
“The gap isn’t a lack of ambition, it’s where investment is being directed. Many lenders are focusing on broker portals and other support tools, but the real opportunity lies in investing in the products the market is craving, like specialist buy-to-let, and in the technology needed to accelerate service and product development.”
Hamza Behzad, business development director at Finova, added: “The specialist buy-to-let market is full of opportunity, fuelled by strong broker and borrower demand, particularly across limited company, green, and commercial buy-to-let. Right now, lenders risk being left behind if they don’t evolve.
“Brokers are looking for faster, more flexible lending solutions that can meet complex borrower needs. The challenge for lenders is bridging that gap, and the right technology is key.”
