Brokers could grow their buy-to-let (BTL) business through unencumbered rental properties, it was said on a video debate hosted by Brightstar Financial.
Guest Sam Debenham, senior business development manager (BDM) at Paragon Bank, spoke with Andrew Cappaert, group head of national accounts at the Brightstar Group, about challenges and opportunities in the BTL sector.
Speaking about unencumbered properties in the market, Debenham said: “Roughly 63% of private rental sector properties are unencumbered.
“That doesn’t mean that all 63% are going to refinance their portfolio to buy new properties, but there is a huge opportunity here for those landlords who are looking to acquire more stock.”
Landlords increasing yields
Debenham said landlords were also looking to restructure their portfolios and improve their yields.
He added: “Some landlords are really analysing their portfolios and looking at the investment property they hold. This helps them to see where they could make improvements, perhaps targeting higher-yielding properties.
“HMOs [houses in multiple occupation] are the obvious example. There’s an old-fashioned perception of them being big ugly buildings and not very nice places to live, but week in week out, we see some fantastic HMOs – really high-quality properties. Landlords are trying to be creative when looking at HMO conversions to ensure they attract the highest possible rent.”
Debenham said: “Another strategy is to target properties that need improvement, which can provide capital appreciation as well as increased rent. Semi-commercial properties offer another option – and considering whether they rent it out as it is or convert to residential dwellings. So, there are lots of options for landlords.”
Keeping relationships going during the product transfer trend
Debenham and Cappaert also spoke about the rising use of product transfers in BTL, with Debenham saying: “Over the past year, I’ve heard more about product switches and the number of brokers who are involved in product switches. Half of our product switches last year were done by brokers, and of those, 41% were done by different intermediaries, which is really surprising.”
Cappaert added: “We find that across the board. There is so much opportunity for brokers to just keep their relationship going with their client. A lender will always contact the client when it comes to a product switch, so we are encouraging intermediaries to keep in contact. It’s surprising that people let that go. It’s low-hanging fruit.”
The full video debate is available to watch here.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
