Warning of widening gap between broker demand and lender innovation

November 12, 2025
Noah
Brokers
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A widening gap between broker demand and lender innovation in the specialist buy-to-let market has been uncovered by Finova.

The provider found, over the past year, 63 per cent of brokers reported increased demand for specialist BTL products, with 75 per cent seeing a particular surge in limited company BTL products.

However, lenders are remaining cautious, with 41 per cent citing limited broker demand as the main barrier while 45 per cent point to regulatory constraints.

Among specialist lenders, 63 per cent say lack of broker demand is holding back innovation which, according to Finova, exposes a mismatch between demand in the market and what lenders are offering.

Finova chief executive officer, Gareth Richardson, said: “We’re seeing a real shift in the specialist BTL market, with brokers responding quickly to growing investor demand. However, the flip side is that many lenders are still playing catch-up.

“The gap isn’t a lack of ambition, it’s where investment is being directed.

“Many lenders are focusing on broker portals and other support tools, but the real opportunity lies in investing in the products the market is craving, like specialist BTL, and in the technology needed to accelerate service and product development.

“There’s huge potential here, and those who can adapt quickly and with confidence will be the ones leading in specialist BTL.”

Barriers

Additionally, Finova examined what factors are holding lenders back, discovering that 38 per cent identified technology challenges as a barrier to innovation.

This suggests that many lenders are still grappling with legacy systems that can slow product development or limit their ability to respond quickly to borrower demand.

With market volatility shaping product design and influencing risk appetite, 36 per cent of lenders pointed to evolving swap rates as the biggest barrier.

Meanwhile, 35 per cent flagged margin pressures or low affordability, underlining the challenges of balancing competitive pricing with viable returns.

Bridging innovation gap

The research pointed towards a disconnect between lenders’ intentions to innovate and their actual investments.

Some 78 per cent of surveyed lenders said their appetite for innovation is stronger than it was two years ago, a figure which rises to 83 per cent among building societies.

However, only 15 per cent of lenders are prioritising investing in entirely new product types, and just 11 per cent are focusing on faster decision engines, suggesting that opportunities for innovation could be missed.

It was also discovered that, when looking at investment priorities, 21 per cent of lenders are channelling investment into broker portals and communication tools.

However, brokers say the biggest under-delivery areas lie elsewhere with 48 per cent pointing to flexibility for complex borrowers, and 43 per cent citing speed of services, suggesting that brokers’ and lenders’ business goals are not aligned.

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