Unencumbered rental properties offer great opportunities for brokers – Brightstar – The agent

Unencumbered rental properties represent a huge opportunity for agents to grow their buy-to-let (BTL) business, according to Brightstar Financial’s latest video.

In the video, Sam Debenham, Senior Business Development Manager at Paragon Bank, talks to Andrew Cappaert, Group Head of National Accounts at Brightstar Group, about the current challenges and opportunities in the BTL sector.

On the subject of unencumbered properties, Debenham said: “Around 63% of properties in the private rental sector are unencumbered.

“While this does not mean that all 63% will refinance their portfolio to buy new properties, this represents a huge opportunity for landlords looking to acquire more inventory.”

The two also discussed the trend among landlords to revalue and restructure their portfolios to achieve higher returns.

Debenham highlighted that some landlords are analysing their portfolios and reviewing their investment properties to see where improvements can be made, focusing on higher yielding properties.

He added: “Houses with multiple occupants (HMOs) are the obvious example.”

“There is an old-fashioned idea that these are big, ugly buildings and not particularly nice places to live, but week after week we see some fantastic HMOs – really high-quality properties.

“Landlords are trying to be creative in redesigning HMOs to get the highest rent possible.”

He continued: “Another strategy is to focus on properties that need renovation, which can lead to increased value as well as higher rents.

“Semi-commercial properties offer another option – whether to rent them as is or convert them into residential space. So there are many options for landlords.”

During the video, the pair also discussed the growing trend of product transfers in the buy-to-let sector.

Debenham stressed that he had heard more about product switching and the number of brokers involved in product switching over the past year.

He added: “Half of our product switches last year were done by brokers, and of those, 41% were done by different intermediaries, which is really surprising.”

Cappaert said: “We see this everywhere. There are so many ways for brokers to easily maintain the relationship with their clients.

“A lender will always contact the customer when it comes to switching products, so we encourage brokers to keep in touch. It’s surprising that people neglect this. It’s a no-brainer.”