Ensuring smaller portfolio landlords aren't being ignored

Operating in a market where we can easily become obsessed with big numbers - in terms of volume, scale and distribution - it’s sometimes the case that smaller components can often be, at best, underserved or, at worst, ignored.

At a recent event, I heard that a ‘significant’ portion of smaller portfolio landlords are being ignored by brokers and lenders when it comes to updates about regulation and market trends. This is an area where we can all improve by constantly evaluating how we communicate, what kind of messages we are sending and to who. Feedback, and actively listening to this feedback, is also an often-understated part of any communications strategy. It opens the door to really understanding what intermediary partners and their landlord clients actually want, instead of making assumptions based on existing business models or where historic demand is coming from.

Criteria is often the link where we can integrate intermediary/client feedback into propositions and meet changing demand/trends. It’s also a place where even the smallest changes can take you pleasantly by surprise. For example, here at Foundation Home Loans, we recently reduced our minimum property value from £75,000 to £60,000 and a minimum loan size from £50,000 to £30,000 for portfolio landlords. Now this was done with little fanfare. Communications around this were reasonably muted in relation to other product developments, launches and criteria changes. It was a change which made a lot of sense in the current BTL market but, in all honesty, it didn’t necessarily have a huge amount of expectation attached to it.

However, as is often the way, timing is everything. With so many portfolio landlords currently looking to diversify their portfolios and spread their risk exposure, this proved to be a bigger hit with a wider range of portfolio landlords than we initially thought. Although maybe we should have known better. One of the growing themes we’ve seen from portfolio landlords is their willingness to look at all regions across the UK in terms of purchase opportunities, specifically those where they might find lower-priced properties with stronger rental yields. A number of UK regions fit the bill perfectly, particularly in the North of England where landlords can benefit from highly competitive rates to increase profitability. It’s no secret that the search for yield is a constant one, and it’s up to lenders to provide choice and flexible features to better support landlords who want to add, or refinance, a variety of property types within their portfolios.

From relatively humble beginnings, the buy-to-let sector has developed into a crucial, and sizable, component within the wider mortgage market. And it’s some of the more innovative specialist lenders who will continue driving this market forward by supplying the type of products and accommodating criteria that the modern-day portfolio landlord demands, however large or small.