One of the clearest signs of this evolution is the surge in limited company borrowing.

Limited company borrowing exemplifies how dramatically the BTL market has evolved, as holding properties in incorporated entities grew in favour for a more favourable tax structure.

At the start of this year, the number of BTL limited companies exceeded 400,000 for the first time and landlords are progressively choosing this type of ownership, suggesting a more professional approach to investments.

It is thought that this trend was accelerated by tax changes introduced in 2016, and with more reforms on the horizon, it is reasonable to assume that the BTL market will get even more diversified and sophisticated.

Professional landlords are now prioritising higher-yield investments, and this is reflected in the types of properties they’re targeting.

A growing number of professional landlords are seeing the benefits of specialist property types and looking into semi-commercial and houses in multiple occupation (HMO) as a result.

They have clearly recognised the investment edge these properties have on standard dwellings, a sign that landlords have the savviness to pivot and enter new segments if the investment makes sense.

With the specialist mortgage market expected to be valued at £54bn by 2029, that will undoubtedly include growth across specialist BTL, and it is apparent that landlords are ready to capitalise on this.

As landlords diversify, lenders face mounting pressure to meet complex borrowing needs.

While specialist BTL products exist, most lenders offer piecemeal solutions rather than comprehensive platforms that serve the full spectrum of landlord needs.

A recent survey conducted by Finova found that 63% of brokers witnessed a rise in demand for specialist mortgage lending in the last year, and 75% said this demand was for limited company borrowing.

The same research suggested that , as brokers said many did not offer applicable products, indicating a gap to be filled and an opportunity to be gained.

This may partially be down to lenders playing catch up with the way the market is changing and the inability of lender systems to meet demands quickly.

Many lenders are constrained by legacy technology that would require a costly overhaul to be brought up to modern standards that can meet market shifts and demands.

Regulatory boundaries introduced after the global financial crisis have compounded this challenge, as this created caution among lenders and influenced their risk appetite regarding anything outside of the mainstream.

These guard rails were even called out by the Financial Conduct Authority (FCA) for potentially limiting mortgage access and innovation in the mainstream market, so when it comes to specialist lending, it is unsurprising that progress might seem slow.

Specialist lending may require access to diversified funding, adapted risk weighting and an internal team that fully understands the complexities of borrowers and assets.

If a lender does not have the capacity for this, an out-of-the-box service could resolve some of these dilemmas.

So, it may not be that lenders are unwilling to recognise the gains available in specialist BTL lending, but internal resources limit what they can do.

Even so, many are taking action; 36% of lenders are considering a separate origination platform, and 29% already have one.

This is where flexible technology can take on that burden and give lenders a solution.

Finova’s specialist BTL lending platform can be bolted onto a lender’s existing system, instantly giving them the capacity to launch specialist BTL mortgages in as short as four months.

The platform can support the full BTL offering across various lending types such as limited company borrowing, individual borrowers and portfolio landlords. It can also facilitate a range of property types such as standard, houses in multiple occupation, and multi-unit blocks.

The platform comes with all the core components lenders need — including case management, decisioning, and document production — delivered as part of a single, specialist BTL solution.

It is also integrated with services such as Experian, Companies House, Landmark Quest, and Loqate to support the lending journey.

Specialist lending evolves quickly, so future proofing is critical. Cloud-based architecture and intelligent automation provide the agility lenders need.

The BTL market is evolving rapidly, and specialist lending has shifted from niche offering to competitive necessity. For lenders, the challenge isn’t recognising the opportunity, broker demand makes that clear, it’s deploying the infrastructure to capture it.

Those who solve the technology challenge first will be better positioned to serve an increasingly sophisticated landlord base and capture their share of a market projected to reach £54bn within five years.

Book a demo to see how Finova Lending can help you go live with specialist products in just four months.