Buy-to-let property investment remains a popular way to generate income and build long-term wealth, but the mortgage process is often more complicated than first-time landlords or even experienced investors expect. While some applications are straightforward, others involve layers of complexity that can quickly become stumbling blocks without the right support.
In this blog, we explore:
- Why buy-to-let mortgage applications can be complicated
- Common issues that make a mortgage “non-standard”
- Real-world scenarios showing how complications arise
- Why working with a specialist mortgage broker is often essential
- Key statistics that show the difference a broker can make
What Makes a Buy-to-Let Mortgage Application Complex?
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Lenders assess buy-to-let mortgage applications very differently from residential mortgages. It’s not just about you — they also need to feel confident in the property, the rental market, and the structure of the deal.
Here are the most common factors that complicate an application:
Ownership Structure
- Are you buying as an individual or through a limited company (SPV)?
- Are you transferring property from personal ownership into a corporate entity?
Limited company purchases are growing in popularity for tax efficiency, but not all lenders accept SPVs, and those that do may have stricter terms.
Income Type
- Are you self-employed or working as a contractor?
- Do you have irregular or multiple income streams?
- Are you relying on top-slicing, using your personal income to support the mortgage?
Unconventional income often falls outside standard lending criteria and requires a more tailored approach.
Property Type
- Some properties are harder to mortgage than others. These include:
- Flats above commercial premises (like shops or takeaways)
- Houses of multiple occupancy (HMOs)
- Multi-unit freehold blocks
- Ex-local authority properties
- Properties with short leases or unusual construction types
Lenders may reject these outright or offer much more limited options.
Landlord Experience
- Are you a first-time landlord or first-time buyer?
- Do you already own four or more properties, making you a portfolio landlord?
Both ends of the spectrum can present challenges — inexperience on one hand, and detailed portfolio scrutiny on the other.
Example Scenario 1: Buying Through a Limited Company
Emma’s story:
Emma is a higher-rate taxpayer with two rental properties in her name. To reduce her tax burden, her accountant advises her to buy her next property through a Special Purpose Vehicle (SPV) — a limited company set up for property investment.
What went wrong:
Emma’s usual bank doesn’t offer BTL mortgages to limited companies. Other lenders quote high rates, demand personal guarantees, and ask for detailed documentation. Some reject her application outright due to her company’s SIC code.
How a broker can help:
A specialist mortgage broker identified lenders that:
- Accept SPVs with Emma’s setup
- Offered competitive rates with manageable fees
- Didn’t impose excessive restrictions
- Worked with her accountant to ensure long-term tax efficiency
With the broker’s help, Emma secured the right mortgage and set herself up for future tax savings and scalability.
Example Scenario 2: A Flat Above a Shop
Peter’s story:
Peter wants to buy a flat above a bakery to let out. It’s in a prime location and priced below market value. However, his bank declines the application, labelling the property as “non-standard.”
The complications:
- The flat is above a food outlet — a red flag for many lenders due to smells, fire risks, or insurance issues
- The flat has a shared entrance with the shop
- The remaining lease is only 70 years, below the threshold for many lenders
How a broker can help: A seasoned broker:
- Located specialist lenders comfortable with semi-commercial properties
- Ensured the lease met minimum requirements or guided Peter through the lease extension process
- Flagged any long-term risks so Peter could proceed with eyes open
Peter avoided a costly mistake and secured a mortgage that matched the property’s true investment potential.
Why a Specialist Mortgage Broker Can Make All the Difference
Complicated buy-to-let mortgages aren’t unusual, and neither is being declined by lenders who aren’t equipped to handle them. But a mortgage rejection can waste time, delay purchases, and even damage your credit profile.
Here’s where a buy-to-let specialist broker earns their value:
- Access to Specialist Lenders
Many brokers work with lenders that only operate via intermediaries. These lenders often specialise in limited companies, HMOs, multi-unit blocks, and other complex cases.
- Deep Understanding of Criteria
Brokers understand how lenders assess risk and can position your application to highlight strengths while mitigating red flags.
- Saves Time and Stress
From gathering paperwork to chasing underwriters, a broker manages the whole process, freeing you to focus on your property goals.
- Better Rates and Terms
This is where brokers can add serious value — by negotiating better rates, often avoiding unnecessary fees, or finding lenders who are flexible on criteria.
What Do the Statistics Say?
While case-by-case outcomes vary, industry research reveals just how impactful brokers can be, especially for buy-to-let investors.
Key Statistics
- 80% of buy-to-let mortgage applications are now made via brokers, according to the Intermediary Mortgage Lenders Association (IMLA). This reflects how crucial broker support has become in this complex market.
- A report from the Financial Conduct Authority (FCA) showed that customers using brokers are more likely to secure lower interest rates than those who go direct — particularly in complex or higher-value cases.
- Twenty7tec, a mortgage technology platform, found that broker-placed applications are more likely to be approved at first attempt, reducing time to offer and increasing certainty for buyers.
What This Means for You:
If your mortgage is anything other than “standard,” a broker could be the difference between:
- Paying mo0re or securing a competitive interest rate
- Completing a purchase on time — or losing the deal
- Having your application accepted, or repeatedly rejected
Final Thoughts: Don’t Leave Complex Deals to Chance
Buy-to-let property is a solid investment strategy, but complicated mortgages require experience, strategy, and access to the right lenders.
Whether you’re buying through a company, looking at a quirky property, or dealing with a non-standard income setup, the key is to work with someone who understands the full picture.
A specialist mortgage broker doesn’t just improve your chances of success — they help you build a better long-term investment, with the right mortgage supporting your goals.
Thinking about a buy-to-let mortgage with a twist? Get expert guidance before you apply. It could save you thousands — and save the deal.
Disclaimer
Most Buy-to-Let mortgages are not regulated by the Financial Conduct Authority
The information provided in this article was correct at the time of publication (August 2024)
Liddle Perrett Ltd is an appointed representative of PRIMIS Mortgage
Network, a trading name of First Complete Limited. First Complete Limited is authorised and regulated by the Financial
Conduct Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE