Unencumbered rental properties present a big opportunity for brokers to grow their buy-to-let (BTL) business, Brightstar Financial reveals.

The comments were made in a video, released by Brightstar, which features Paragon Bank senior business development manager Sam Debenham and Brightstar Group group head of national accounts Andrew Cappaert.

Debenham says roughly 63% of private rental sector properties are unencumbered.

He adds: “That doesn’t mean that all 63% are going to refinance their portfolio to buy new properties, but there is a huge opportunity here for those landlords who are looking to acquire more stock.”

The pair also discussed the trend for landlords to reassess and restructure their portfolio to deliver bigger yields.

Debenham states: “Some landlords are really analysing their portfolios and looking at the investment property they hold. This helps them to see where they could make improvements, perhaps targeting higher yielding properties.”

Using HMOs as an example, he says: “There’s an old-fashioned perception of them being big ugly buildings and not very nice places to live but week in week out, we see some fantastic HMOs – really high-quality properties. Landlords are trying to be creative when looking at HMO conversions to ensure they attract the highest possible rent.”

He suggests that another strategy is to target properties that need improvement to provide capital appreciation as well as increased rent.

He adds: “Semi commercial properties offer another option – and considering whether they rent it out as it is or convert to residential dwellings. So, there are lots of options for landlords.”

During the video, the growing trend of product transfers in BTL was discussed.

Debenham states: “Over the past year, I’ve heard more about product switches and the number of brokers who are involved in product switches. Half of our product switches last year were done by brokers, and of those, 41% were done by different intermediaries, which is really surprising.”

Meanwhile, Cappaert adds: “We find that across the board. There is so much opportunity for brokers to just keep their relationship going with their client.”

“A lender will always contact the client when it comes to a product switch, so we are encouraging intermediaries to keep in contact. It’s surprising that people let that go. It’s low hanging fruit.”