Lower leverage, stronger positions: Why advisers should be looking closely at the lower-LTV space

There’s a noticeable shift underway in how some landlords are approaching their financing, and for advisers, it’s opening up a new avenue of opportunity – particularly for those clients operating with lower levels of gearing.

Over the past year, we’ve seen an increase in demand for products specifically catering to landlords with lower-loan-to-value (LTV) requirements.

It’s not hard to see why. In a market where affordability remains a challenge and regulation continues to shift, these clients are often looking for more stability, more efficiency, and ultimately, more value for money. 

Advisers will recognise the profile straight away. These are landlords who’ve typically held properties for a number of years, benefitting from long-term house price growth and building up significant equity. They’re not chasing maximum borrowing or high leverage; instead, they want to reduce costs, maintain a strong yield position, and keep things manageable – particularly as their portfolios mature. 

This cohort is growing. And with that growth comes the need for more tailored solutions – products that don’t penalise borrowers for having lower leverage, but instead reward them with keener pricing and better affordability outcomes. 

Products to suit lower-LTV needs 

From a lending perspective, this is where products, like those we have recently launched in the 55% LTV bracket, come into their own. They often offer access to more competitive rates than you’d find at higher LTVs, and they’re naturally more accommodating when it comes to stress testing, which can be a hurdle for some clients. 

Stress testing is still a significant factor in the buy-to-let (BTL) space. Even for experienced landlords with strong track records, affordability checks can be tight – particularly where yields are lower or rental income hasn’t kept pace with interest rate movements. Lower-LTV products can make a real difference here, enabling advisers to secure the funding their clients need while staying within the necessary thresholds. 

We’re also seeing these products used more strategically by landlords who are refinancing to reposition their portfolios. That might be to consolidate debt, reduce exposure, or simply to lock into a lower cost of borrowing while the opportunity is there. For advisers, this means more scope to have those portfolio-level conversations and demonstrate the value of thoughtful, long-term borrowing planning. 

Limited company borrowing also behind the trend 

Another angle worth noting is the role of limited company borrowers.

A growing proportion of BTL activity now runs through limited companies, where it’s not uncommon to see landlords retaining profits within the business and recycling that capital into new purchases or lower-LTV refinancing. The ability to access 55% LTV products here is a real win – combining the tax efficiency of a limited company structure with the financial benefits of lower gearing. 

Of course, all of this relies on advisers being able to engage confidently with their clients about strategy – and that’s where ongoing support and education come in. We recently released a house in multiple occupation (HMO) guide aimed specifically at advisers and landlord clients, helping them navigate the additional complexity that comes with HMOs.

It’s a niche area, but a growing one, and many of the landlords operating in that space are exactly the sort who are likely to be considering lower-LTV finance.

While that guide is just one part of the puzzle, it speaks to a wider point – namely, that advisers need resources, insights and products that reflect the changing shape of landlord demand. The BTL market is no longer about one-size-fits-all solutions. It’s about matching the right product to the right client, based on their goals, circumstances, and risk appetite. 

Lower-LTV products might not dominate the headlines, but they’re fast becoming an essential part of the toolkit for advisers working with more established, equity-rich landlords.

As those client needs evolve, it’s important we move to meet them with a proposition that’s both competitive and built for the long term.