"We’re seeing a real shift in the specialist BTL market, with brokers responding quickly to growing investor demand. However, the flip side is that many lenders are still playing catch-up"
- Gareth Richardson - Finova
Over the past year, 63% of brokers reported rising demand for specialist BTL products, with 75% seeing a particular surge in limited company BTL products.
Despite this, lenders remain cautious, citing regulatory constraints (45%) and limited broker demand (41%) as the main barriers. Among specialist lenders, 63% say a lack of broker demand is slowing innovation, highlighting a mismatch between market needs and what lenders are offering.
The report, The New Foundations: Building the Next Era of BTL Lending, examines trends in current product demand and the appetite for future innovation.
Barriers to lender innovation
Several factors are holding lenders back from developing new specialist BTL products:
Technology challenges: 38% of lenders report that legacy systems slow product development or limit responsiveness.
Evolving swap rates: 36% cited market volatility as a key influence on product design and risk appetite.
Margin pressures: 35% highlighted low profitability or affordability challenges.
Bridging the innovation gap
The research points to a disconnect between lenders’ intentions to innovate and their actual investment. Over three-quarters (78%) of lenders – rising to 83% among building societies – say their appetite for innovation has grown compared with two years ago.
However:
Only 15% of lenders are prioritising entirely new product types.
Just 11% are focusing on faster decisioning engines.
21% are investing in broker portals and communication tools, while brokers identify other priorities.
Brokers report under-delivery in areas such as:
Flexibility for complex borrowers (48%)
Speed of service (43%)
This suggests that brokers’ and lenders’ business goals are not fully aligned.
“We’re seeing a real shift in the specialist BTL market, with brokers responding quickly to growing investor demand. However, the flip side is that many lenders are still playing catch-up," explains Gareth Richardson, chief executive officer at Finova.
He added, “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 BTL, and in the technology needed to accelerate service and product development. There’s huge potential here, and those who can adapt quickly and with confidence will be the ones leading in specialist BTL.”
Hamza Behzad, business development director at Finova, said, “The specialist BTL market is full of opportunity, fuelled by strong broker and borrower demand, particularly across limited company, green, and commercial BTL. 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. By moving beyond legacy systems and investing in agile origination platforms, lenders can not only keep pace with broker demand but stay ahead of it.”
