The Intermediary – March 2026 - Flipbook - Page 43
BUY-TO-LET
Opinion
Lender reliability
will remain crucial,
even if rates fall
T
he buy-to-let (BTL)
market has endured
a prolonged period
of adjustment. Rapid
interest rate changes
throughout 2022
and 2023 and shiing regulatory
frameworks have all combined in
recent years to reshape how landlords
and brokers approach borrowing.
But, with 2025 concluding on a sixth
base rate cut since August 2024 and
the Bank of England indicating that
it should be able to reduce interest
rates further if inflation stays on
track – albeit without saying by how
much or precisely when – aention
is turning towards what a lowerrate environment could mean for
the market.
For landlords, that could translate
into improved affordability and
renewed confidence. For lenders,
however, it represents something of
a crossroads.
Historically, rate reductions have
led to a ‘race to the boom’, with
competition around who can offer the
lowest rates. The temptation to lead
with price, therefore, will return for
many lenders.
But the BTL sector is not the same
as it was before the volatility of the
last couple of years. Broker priorities
have shied towards certainty, and it’s
that quality that lenders will need to
provide in the coming months.
Rate-led competition
When the base rate is falling, or
generally residing at a lower level,
the market’s primary focus tends to
gravitate towards headline pricing.
Sourcing tables tighten and lenders
compete to secure visibility.
On paper, this appears positive. Yet
an overemphasis on price can mask
more fundamental considerations.
We’ve seen in previous cycles that
a race to the boom oen creates
unintended consequences. Products
can be withdrawn quickly. Criteria
can tighten quietly. Service levels can
become stretched as volumes increase.
For brokers managing client
expectations in real-time, that
instability is far more damaging than
a slightly higher interest rate.
Even as headline rates ease,
borrowing capacity does not always
improve in tandem. And so, a lender’s
reliability maers just as much, if not
more, than the rate being offered.
Certainty outweighs savings
Now, it’s important to recognise that
this is indicative of a shi. Aer years
of volatility, brokers are now turning
to lenders that can provide more
predictable outcomes.
With an ever-changing investment
landscape, it’s solid criteria, consistent
underwriting decisions and realistic
timeframes that allow advisers to be
confident in the advice they’re giving.
Therefore, marginal pricing
advantage offers limited benefit if
a case is rejected late in the process.
Equally, ambitious service claims lose
credibility if they’re not supported by
actual delivery. For purchase cases in
particular, certainty of completion
is obviously critical as delays can
jeopardise transactions entirely.
On this note, it’s important to
recognise that landlords themselves
are also more cautious than they
might have been three years ago.
While falling rates may ease some
affordability pressures, buy-to-let
investors are running their portfolios
with greater scrutiny and are less
inclined to take unnecessary risk.
This risk aversion gets passed
onto brokers, so lenders that aren’t
consistent will quickly fall out of
DARRELL WALKER
is group sales director
at Chetwood Bank for
ModaMortgages and CHL
Mortgages for Intermediaries
favour, because it harms brokers’
reputations as well.
The new battleground
As we move into a potentially lowerrate environment, underwriting will
become the key differentiator in the
buy-to-let financing space.
The sector requires clear judgement
as well as a good process, whether
that’s when assessing multi-property
portfolios, dealing with layered
income streams or working with a
variety of property types. Experience
and clarity from the very start of the
process will set lenders apart.
What’s more, for the sector in
general, sustainable growth cannot
be built on price alone. We should
all be looking to raise underwriting
standards that remain steady as
volumes increase. Brokers will
increasingly value lenders whose
criteria do not shi unpredictably
and whose appetite is communicated
clearly from the outset.
Importantly, certainty doesn’t
mean inflexibility. It means defined
parameters, transparent decisionmaking and consistency over time.
Those qualities create trust, and
trust is what ultimately drives repeat
business in the intermediary market.
Just as with eye-catching rates, any
bold promise from a lender must be
backed up every single time. A broken
promise likely results in a broken deal,
and that’s unacceptable for brokers.
It will be lenders that are
uncompromisingly consistent, clear
and certain that are best placed to
support in 2026, regardless of the
direction of the base rate. ●
March 2026 | The Intermediary
41
