As his company rebrands to Dynamo, the BTL supremo talks to Gary Adams about how it all began, the state of the market today and his plans to harness technology to expand the business
“I am a nice guy, I gave advice for free, but I soon thought that I could monetise it,” Ying Tan says as he reflects on how he arrived at where he is today. Mortgage Strategy is enjoying an afternoon with the enthusiastic founder and chief executive of The Buy To Let Business, who has a lot to say about where his company and where the BTL sector is heading.
But first, over to how things started. Tan began his career in investment banking and was a portfolio landlord prior to setting up his business in 2006. Upon realising that, in terms of his interest in BTL, he “was telling my mortgage broker what to do, when to do it, and how”, he promptly set up The Buy to Let Business in an office in Guildford in a room with no windows. Over a decade later and Tan oversees nearly 200 people in a 13,000sq ft office – and this one has plenty of glass in the walls.
The story Tan tells from here is one where rapid growth plays a central part, and the plans he is hatching for the future make it clear that he is not planning on applying the brakes any time soon.
In the course of the afternoon, we cover The Buy To Let Business’s future. First on the agenda is something big: by the time you read this, you will know that The Buy To Let Business is now called Dynamo. “This is a name that you may have heard before,” says Tan. He explains that it comes from a joint venture between Countrywide, which two years ago made a significant investment in The Buy To Let Business, and equity growth firm Blenheim Chalcot.
Last October, the Dynamo brand was re-integrated into Countrywide Group, “which was really good timing for us”, Tan says, “because this wonderful name – this single word domain name, which is current and modern, was something we could use rather than looking at one of those abstract names you see a lot of currently”.
It is clear from our talk that the BTL sector consumes Tan’s thoughts, so the question is obvious: why the rebrand? “Our core has always been BTL, but as we have grown, we have become more than this,” he explains. “We have gone from having 2 per cent of our business being non-BTL to 35 per cent. We have come to a stage where we need to reflect the fact that we are now a significant player in other fields, and our old name clearly does not do that.”
There is a second aspect to the thinking, too: “We are becoming far more tech-savvy,” says Tan. “Over the years we have built – and we are very proud of – several in-house systems from the ground-up. We have not outsourced anything, we have not bought anything from the shelf. We have evolved to the extent that we have one of the leading systems in the UK, which is entirely internal, and no one really knows about it.”
“We are hugely advanced when it comes to APIs, e-signatures, automation, avoiding the duplication of entry, and we have some really sexy client portal work. What we have done – and what we are continuing to do – is building technology as an Iron Man analogy. We are making the human [working at Dynamo] faster, stronger, more efficient… it is not robo-advice, I believe we are many years away from that – but what we have got is technology that allows our staff to be far more productive,” he continues.
“That has always been there, but because of our old name, sometimes we were pigeon-holed as just BTL telephony businesses, when in fact we are a big, tech-savvy organisation, and this new name aligns with this vision of no longer being just BTL, but becoming a major player and disruptor in residential, commercial, seconds and protection.”
On being asked if Dynamo plans on putting a white label on this impressive-sounding technology, Tan is adamant that this is not being considered currently: “We have seen some other people do it, and they have lost their focus of being a mortgage broker in becoming a tech firm. That is great, and I wish them luck, but one thing I have learnt is to stay focused, and being a mortgage broker and a mortgage club is very much what we are.”
The move into other areas in the mortgage industry and the intention of increasing this is an intriguing prospect. Is this something that Tan planned from the start, or something more serendipitous?
Place of birth: Farnborough, Hampshire
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“Initially we were very focused on BTL, hence the name – but [it is] something we have absolutely envisaged doing as we have grown. Because we have become such a big player in BTL, it is only natural for us to say that, as the sector becomes more challenging, in order to keep growing, we need to not aim solely for the £35bn market, but to play properly in the £250bn market that is residential. This is not to say that our BTL share will get smaller – in fact, I believe that this will expand too, because after all it is our specialism. But because of our overall size and scale, and because we are extremely ambitious, we have to evolve in this way… I am not naïve enough to think that we can continue to grow to 400-500 people with all the technology in the world, just to focus on the BTL market.”
And in what condition does Tan see this market, which he clearly lives and breathes, in the future?
“The BTL market at the moment is clearly not as strong as it has been in the past,” Tan says, and he is not shy in expanding his thoughts: “Despite that, it still allows for a strong business model simply because there is a shortage of property out there, and rates at the moment are market-leading.”
He adds that, when he bought his first BTL property in 1996, he was proud of getting a 7.99 per cent rate. “This shows you where things have come. It is a bit of a cliché, but you make money in property when you buy it. And I think that you have to ask yourself what the alternative choices for investment are. With BTL, you have control over your investment… you can add value to it through renovation, through making sure you choose a strong location.
“Of course [increased] regulation has hurt the sector – it has impacted it significantly, which is why purchase probably only accounts for 20 per cent of our business at the moment, while 80 per cent is BTL remortgages. But while property is no longer as profitable as it once was, it is still profitable, especially when rates are as competitive as they have ever been and with the introduction of specialist lenders into the market, which has really made things exciting.
“I think BTL is very much part of the mortgage market, and an important part of the economy, but it is not going to see double-digit growth year-on-year any more. I think it will continue to be profitable, but for the right kind of landlord, who does their research, and understands the market and is going for it as a businessperson and as a business venture, rather than just because they heard at a dinner party it might be profitable. Those days are coming to an end, and you really need to make sure that you do the relevant due diligence to be successful in BTL.”
In any discussion about the economic environment it proves to be most difficult to avoid two looming events – one more likely to occur than the other: a Jeremy Corbyn government and – you guessed it – Brexit. On the former, Tan is “reasonably scared” but says that there is nothing he would be able to do about it. On the latter, Tan insists that it is not having much impact on his business at all. “The one thing you must not do is allow external influences to dictate what you do, because you will procrastinate, you will be indecisive.
“Brexit has given uncertainty – no doubt about it, but we have not held back in recruiting staff, in developing our technology, and in our rebrand.” He says that Dynamo is a slick, lean business driven by technology and determined people, and that whatever happens with Brexit, this will not change.
“The one thing I have learned being a landlord myself for the best part of 25 years, is that we have seen so many things over the years that have been chucked at the industry. So many things chucked at our businesses, at landlords, at BTL, and one thing that people do in this business is adapt and survive.”
Tan’s belief and enthusiasm in the sector is such that you leave the room wondering how much capital you need to get started as a landlord.