By Hamza Behzad, Business Development Director, Finova
Buy-to-let lending has shown notable resilience over the past year, even against a backdrop of economic uncertainty and regulatory change. Within that, specialist buy-to-let has emerged as one of the most important areas of momentum. What was once viewed as a niche is now firmly part of the mainstream, and its pace of evolution is accelerating.
According to UK Finance, gross buy-to-let lending reached £37.3bn over the past 12 months, underlining the sector’s strength during a period of market volatility. Within that total, specialist buy-to-let is increasingly driving growth, with forecasts suggesting the sector could reach £54bn by 2029.
The data also points to a shift toward more professionalised landlord activity, with portfolio landlords accounting for an increasing share of buy-to-let lending. This reflects a market that is becoming more complex, more structured and more demanding.
Yet while demand continues to rise, Finova’s latest research shows that many lenders are still finding it difficult to turn ambition into consistent delivery.
Ambition is strong, but progress is uneven
There is no shortage of intent across the lending market. Our research shows that 78% of lenders say their appetite for innovation is stronger than it was a year ago, rising to 83% among building societies. This reflects a clear desire to modernise propositions and capture growth in specialist segments.
However, progress is being slowed by a familiar set of challenges. 45% of lenders cite regulation as the biggest barrier to innovation, followed by technology constraints (38%), margin pressure (35%) and swap rate volatility (36%).
Across the market, lenders continue to point to the cumulative impact of regulatory and prudential requirements on buy-to-let lending, particularly around affordability, capital treatment and operational complexity. These pressures make it harder for lenders to move quickly, even when the commercial opportunity is well understood.
There is also a misalignment when it comes to demand. Some lenders remain cautious, questioning whether specialist buy-to-let delivers sufficient volume or sustainable returns. Brokers, however, tell a different story. More than half (63%) report increased demand for specialist products, suggesting the issue is not appetite in the market, but confidence in execution.
Investment priorities don’t always match market needs
Speed of service is widely recognised as both a competitive differentiator and a regulatory positive. Despite this, only 11% of lenders are prioritising investment in faster decisioning.
Instead, investment is often directed toward front-end improvements. Broker portals and communication tools account for 21% of planned investment, while just 15% of lenders are focused on developing new specialist product types.
While these enhancements have value, they do little to address the core friction brokers and landlords experience when handling complex cases. The result is a growing gap between where lenders want to grow and what their systems are currently designed to support.
Brokers are clear on what needs to change
Brokers, who sit closest to landlord demand, are consistent in their feedback. Flexibility for borrowers with complex needs remains the biggest area of under-delivery in specialist buy-to-let, closely followed by speed of service. This matters because demand is strongest where complexity is highest. Lenders themselves identify limited company buy-to-let and holiday lets as some of the products delivering the strongest margins. At the same time, 44% of lenders say borrowers with complex requirements are the most underserved segment in the market.
From the broker perspective, the challenges are practical and persistent. 39% cite low-EPC properties as a key barrier, 37% point to complex documentation for limited company structures, and 36% highlight regulatory uncertainty. These issues slow approvals and can prevent otherwise viable cases from progressing.
Unless these pressures are addressed, lenders risk falling behind just as the most dynamic parts of the specialist buy-to-let market continue to expand.
Technology as an enabler of scale
Closing the gap between ambition and delivery is not about adding technology for its own sake. It is about applying the right tools in the right parts of the journey.
There is growing interest inmodular origination platforms that operate alongside existing core systems. 36% of lenders are actively considering a separate origination platform for specialist lending, and 29% already have one in place.
When used effectively, these platforms allow lenders to configure distinct journeys for specialist cases, apply different rules for different borrower types, and automate more of the decisioning process without removing underwriting control. This makes it far easier to respond to broker demand across limited company, green and commercial buy-to-let, and to treat specialist lending as a strategic growth area rather than a manual exception.
Turning intent into impact
Specialist buy-to-let is no longer peripheral. It is central to how the market is evolving, driven by brokers and landlords who expect speed, flexibility and clarity.
Lenders already have many of the right foundations in place. The challenge now is focus. Those that align investment priorities with broker demand, reduce friction in complex cases and use technology to support, rather than constrain, underwriting will be best placed to grow alongside the market. The opportunity is moving quickly. The question is which lenders are ready to move with it.
In December, we explored these themes in more detail during our New Foundations: Where specialist buy-to-let lending goes next webinar, sharing practical examples and insights from across the market. You can watch the session on demand here.
